What changed in this filing

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Item 1. Financial Statements

2020-11-06 compared with 2020-08-05 · 279 added, 183 removed, 866 unchanged (35% of the section changed)

4 unchanged sentences

(in thousands, except share amounts)

September 30,

Current assets

31 unchanged sentences

Retained earnings

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

Treasury stock, 11,813,161 and 10,932,182 shares, respectively

9 unchanged sentences

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Product revenues

6 unchanged sentences

Goodwill impairment

Gain on sale of asset

Depreciation and amortization expenses

5 unchanged sentences

Total other expense

Loss from continuing operations before income taxes and income (loss) from equity method investees

Income tax benefit

Income (loss) from equity method investees, net of income taxes

Loss from continuing operations before income taxes and income from equity method investees

Income tax benefit (expense)

Income from equity method investees, net of income taxes

Net loss from continuing operations including noncontrolling interest

Net income (loss) from discontinued operations, net of income taxes

Net income from discontinued operations, net of income taxes

Net income attributable to noncontrolling interests

2 unchanged sentences

Net loss from continuing operations

Net income (loss) from discontinued operations

Net income from discontinued operations

Net loss attributable to Green Plains

6 unchanged sentences

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of $ 859 , ($ 5,149 ), ($ 160 ) and ($ 12,953 ), respectively

Reclassification of realized losses (gains) on derivatives, net of tax expense (benefit) of $ 1 , ($ 947 ), $ 1,431 and ($ 4,087 ), respectively

Reclassification of realized gains on derivatives, net of tax expense of $ 0 , $ 13,445 , $ 1,431 and $ 9,358 , respectively

Other comprehensive income (loss), net of tax

Share of equity method investees other comprehensive income arising during the period, net of tax benefit (expense) of $ 5,336 , $ 0 , ($ 8,023 ) and $ 0 , respectively

Share of equity method investees other comprehensive income (loss) arising during the period, net of tax benefit (expense) of $ 6,705 , $ 3,555 , ($ 1,318 ) and $ 3,555 , respectively

Total other comprehensive income (loss), net of tax

Comprehensive income (loss)

Comprehensive loss

Comprehensive income attributable to noncontrolling interests

5 unchanged sentences

(unaudited and in thousands)

Six Months Ended

Nine Months Ended

‎ September 30,

Cash flows from operating activities:

Net loss from continuing operations including noncontrolling interest

Net loss from discontinued operations, net of income taxes

Net income from discontinued operations, net of income taxes

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

2 unchanged sentences

Goodwill impairment

Gain on sale of assets, net

Deferred income taxes

Stock-based compensation

Loss (income) from equity method investees, net of income taxes

Distribution from equity method investment

Income from equity method investees, net of income taxes

Distribution from equity method investments

Changes in operating assets and liabilities before effects of business combinations and dispositions:

9 unchanged sentences

Purchases of property and equipment, net

Proceeds from the sale of discontinued operations, net of cash divested

Proceeds from the sale of assets, net

Other investing activities

Net cash used in investing activities - continuing operations

Net cash provided by (used in) investing activities - continuing operations

Net cash used in investing activities - discontinued operations

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

10 unchanged sentences

Payments related to tax withholdings for stock-based compensation

Net cash provided by (used in) financing activities - continuing operations

Net cash used in financing activities - continuing operations

Net cash used in financing activities - discontinued operations

4 unchanged sentences

Cash balance included in current assets of discontinued operations at beginning of period

Cash balance included in current assets of discontinued operations at end of period

Cash, cash equivalents and restricted cash, end of period

5 unchanged sentences

Continued from the previous page

Six Months Ended

Nine Months Ended

‎ September 30,

Reconciliation of total cash, cash equivalents and restricted cash:

1 unchanged sentence

Restricted cash

Discontinued operations cash activity included above:

Cash, cash equivalents and restricted cash balance included in current assets of discontinued operations at end of period

Total cash, cash equivalents and restricted cash

Assets disposed of in sale

liabilities disposed

Net assets disposed

Supplemental disclosures of cash flow:

19 unchanged sentences

The assets of the partnership cannot be used by the company for general corporate purposes.

The partnership’s consolidated total assets as of June 30, 2020 and December 31, 2019, excluding intercompany balances, are $ 89.1 million and $ 90.0 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 June 30, 2020 and December 31, 2019, excluding intercompany balances, are $ 174.1 million and $ 180.9 million, respectively, which primarily consist of long-term debt as discussed in Note 9 – Debt and operating lease liabilities.

The partnership’s consolidated total assets as of September 30, 2020 and December 31, 2019, excluding intercompany balances, are $ 87.3 million and $ 90.0 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 September 30, 2020 and December 31, 2019, excluding intercompany balances, are $ 165.1 million and $ 180.9 million, respectively, which primarily consist of long-term debt as discussed in Note 9 – Debt and operating lease liabilities.

The liabilities recognized as a result of consolidating the partnership do not represent additional claims on our general assets.

3 unchanged sentences

As such, GPCC results prior to its disposition are classified as discontinued operations in prior period consolidated financial statements.

See Note 3 - Dispositions and Discontinued Operations for further details.

See Note 3 - Dispositions and Discontinued Operations and Note 17 – Subsequent Events for further details.

The company also owns a 90.0 % interest in BioProcess Algae, a joint venture formed in 2008, and consolidates their results in its consolidated financial statements.

The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X.

Because they do not include all of the information and notes required by GAAP, the consolidated financial statements should be read in conjunction with the company’s annual report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 20, 2020.

The unaudited financial information reflects adjustments, which are, in the opinion of management, necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented.

2 unchanged sentences

Reclassifications

Certain prior year amounts relating to the discontinued operations of GPCC were reclassified to conform to the current year presentation.

These reclassifications affected certain balance sheet line items, total revenues, costs and expenses.

Certain prior year amounts have been reclassified to conform to the current year presentation.

These reclassifications did not affect total revenues, costs and expenses, net income or stockholders’ equity.

Revision of Previously Issued Financial Statements

During the third quarter of 2020, the company identified an immaterial issue which resulted in the overstatement of both revenues and cost of goods sold by $ 30.0 million within the agribusiness and energy services segment as previously reported for the three and six months ended June 30, 2020.

The second quarter revenues and cost of goods sold reflected in the year to date consolidated statement of operations have been revised to correct these amounts.

The company will update revenues and cost of goods sold in future filings to properly reflect these amounts for the three and six months ended June 30, 2020.

Use of Estimates in the Preparation of Consolidated Financial Statements

5 unchanged sentences

The company operates within four business segments:

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

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

Cash and Cash Equivalents

56 unchanged sentences

The company evaluates its physical delivery contracts to determine if they qualify for normal purchase or sale exemptions which are expected to be used or sold over a reasonable period in the normal course of business.

Contracts that

do not meet the normal purchase or sale criteria are recorded at fair value.

Contracts that do not meet the normal purchase or sale criteria are recorded at fair value.

Changes in fair value are recorded in operating income unless the contracts qualify for, and the company elects, cash flow hedge accounting treatment.

19 unchanged sentences

The amended guidance is not expected to have a material impact on the company’s consolidated financial statements.

In August 2020, the FASB issued amended guidance in ASC 470-20 , Debt - Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity - Accounting for Convertible Instruments and Contracts in an Equity’s Own Equity .

The amended guidance simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract.

The amended guidance also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance.

The amended guidance is effective for fiscal periods beginning after December 15, 2021, including interim periods within those fiscal periods.

Early adoption is permitted, but no earlier than fiscal periods beginning after December 15, 2020.

The amended guidance permits the use of either the modified retrospective or fully retrospective method of transition.

The company is currently evaluating the timing of adoption and impact of this standard on its consolidated financial statements however anticipates it will result in an increase to long-term debt and a decrease in additional paid-in-capital as well as a reduction in non-cash interest expense related to the company’s convertible notes.

Revenue Recognition

4 unchanged sentences

Revenue by Source

The following tables disaggregate revenue by major source for the three and six months ended June 30, 2020 and 2019 (in thousands):

Three Months Ended June 30, 2020

The following tables disaggregate revenue by major source (in thousands):

Three Months Ended September 30, 2020

Ethanol Production

12 unchanged sentences

Total Revenues

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Ethanol Production

12 unchanged sentences

Total Revenues

Three Months Ended June 30, 2019 (3)

Three Months Ended September 30, 2019

Ethanol Production

12 unchanged sentences

Total Revenues

Six Months Ended June 30, 2019 (3)

Nine Months Ended September 30, 2019

Ethanol Production

14 unchanged sentences

(2) Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, and are accounted for under ASC 842, Leases .

(3) Revenues include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation.

These revenue transactions are now presented on a gross basis in product revenues.

These revenue transactions total $ 5.7 million and $ 9.1 million for the three and six months ended June 30, 2019.

Major Customers

Revenue from Customer A represented 16 % and 18 % of total revenues for the three and six months ended June 30, 2020, respectively, and 10 % and 12 % of total revenues for the three and six months ended June 30, 2019, respectively.

Revenue from Customer B represented 11 % of total revenues for the three ended June 30, 2019.

Revenue from Customer A represented 10 % of total revenues for the nine months ended September 30, 2020 and 10 % and 11 % of total revenues for the three and nine months ended September 30, 2019, respectively.

Revenue from Customer B represented 11 % and 10 % of total revenues for the three and nine months ended September 30, 2019, respectively.

Revenues from these customers are reported in the ethanol production segment.

2 unchanged sentences

On September 1, 2019, the company, TGAM Agribusiness Fund Holdings-B LP (“TGAM”) and StepStone Atlantic Fund, L.P.

(“StepStone”) formed a joint venture and entered into the LLC Agreement.

(“StepStone”) formed a joint venture and entered into a LLC Agreement.

GPCC was previously a wholly owned subsidiary of Green Plains.

Green Plains also entered into a Securities Purchase Agreement with TGAM and StepStone, whereby TGAM and StepStone purchased an aggregate of 50 % of the membership interests of GPCC from Green Plains for approximately $ 76.9 million in cash.

There was no gain or loss recorded as part of this transaction.

The LLC Agreement contains certain earn-out or bonus provisions to be paid by or received from GPCC if certain EBITDA thresholds are met.

The company will record any gain contingency amounts in the consolidated financial statements when the consideration is received, which is anticipated to be in the third quarter of 2020.

There was no gain or loss recorded as part of this initial transaction.

The LLC Agreement contained certain earn-out or bonus provisions to be paid by or received from GPCC if certain EBITDA thresholds were met.

Pursuant to the bonus provision, on August 31, 2020, Green Plains earned $ 2.0 million which has been recorded within “Gain on sale of asset” on the consolidated statements of operations for the three and nine months ended September 30, 2020.

Under the LLC Agreement, Green Plains has certain rights and obligations, including but not limited to, the right or obligation:

14 unchanged sentences

Total identifiable net assets disposed

Subsequent to September 30, 2020, the company sold its remaining interest in GPCC.

Refer to Note 17 – Subsequent Events for further discussion.

DISCONTINUED OPERATIONS

After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting.

GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting.

Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 .

3 unchanged sentences

The following table presents the results of our discontinued operations (in thousands).

Three Months Ended June 30, 2019 (1)

Six Months Ended June 30, 2019 (1)

GPCC was disposed of on September 1, 2019, as such operational results through August 31, 2019 are included in the fiscal year 2019 amounts presented below.

Three Months Ended September 30, 2019 (1)

Nine Months Ended September 30, 2019 (1)

Product revenues

9 unchanged sentences

Total other expense

Income (loss) before income taxes

Income tax benefit (expense)

Net income (loss)

Income before income taxes

Income tax expense

(1) Product revenues, costs of goods sold and selling, general and administrative expenses include certain revenue and expense items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation.

These revenue transactions total $ 5.7 million and $ 9.1 million for the three and six months ended June 30, 2019, respectively.

These costs of goods sold transactions total $ 5.6 million and $ 9.0 million for the three and six months ended June 30, 2019, respectively.

These revenue and costs of goods sold transactions total $ 5.5 million and $ 14.5 million for the three and nine months ended September 30, 2019, respectively.

FAIR VALUE DISCLOSURES

10 unchanged sentences

The company’s assets and liabilities by level are as follows (in thousands):

Fair Value Measurements at June 30, 2020

Fair Value Measurements at September 30, 2020

Quoted Prices in

25 unchanged sentences

Total liabilities measured at fair value

(1) Accounts payable is generally stated at historical amounts with the exception of $ 25.3 million and $ 37.3 million at June 30, 2020 and December 31, 2019, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices.

(1) Accounts payable is generally stated at historical amounts with the exception of $ 12.3 million and $ 37.3 million at September 30, 2020 and December 31, 2019, 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.

The fair value of the company’s debt was approximately $ 520.7 million compared with a book value of $ 509.3 million at June 30, 2020.

The fair value of the company’s debt was approximately $ 536.7 million compared with a book value of $ 526.0 million at September 30, 2020.

The fair value of the company’s debt approximated book value, which was $ 564.4 million at December 31, 2019.

The company estimated the fair value of its outstanding debt using Level 2 inputs .

The company believes the fair values of its accounts receivable approximated book value, which was $ 67.2 million and $ 107.2 million at June 30, 2020 and December 31, 2019, respectively.

The company believes the fair values of its accounts receivable approximated book value, which was $ 54.5 million and $ 107.2 million at September 30, 2020 and December 31, 2019, respectively.

Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible assets and goodwill acquired and the equity component of convertible debt 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.

1 unchanged sentence

The company reports the financial and operating performance for the following four operating segments:

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

7 unchanged sentences

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Ethanol production:

15 unchanged sentences

Intersegment eliminations

Revenues as reported

(1) Revenues include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation.

These revenue transactions are now presented on a gross basis in product revenues.

These revenue transactions total $ 5.7 million and $ 9.1 million for the three and six months ended June 30, 2019, respectively.

Total Revenues

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

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Cost of goods sold:

3 unchanged sentences

Intersegment eliminations

(1) Cost of goods sold include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation.

These cost of goods sold transactions are now presented on a gross basis in cost of goods sold.

These costs of goods sold transactions total $ 5.6 million and $ 9.0 million for the three and six months ended June 30, 2019, respectively.

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Operating income (loss):

4 unchanged sentences

Corporate activities

(1) Operating loss for ethanol production includes a goodwill impairment charge of $ 24.1 million for the six months ended June 30, 2020.

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

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Depreciation and amortization:

3 unchanged sentences

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

June 30, 2020

September 30, 2020

December 31, 2019

7 unchanged sentences

Commodities held for sale are reported at market value.

There was no lower of cost or net realizable value inventory adjustment as of June 30, 2020.

There was no lower of cost or net realizable value inventory adjustment as of September 30, 2020.

As of December 31, 2019, the company recorded a $ 6.6 million lower of cost or net realized value inventory adjustment reflected in cost of goods sold within the ethanol production segment.

The components of inventories are as follows (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

12 unchanged sentences

As a result, we concluded that the goodwill assigned to the ethanol production reporting unit was impaired and recorded a non-cash impairment charge of $ 24.1 million.

Based on similar factors as noted above, the company determined a triggering event had occurred that required an interim impairment assessment for its partnership reporting unit.

Due to the impairment indicators noted as a result of these triggering events, we evaluated goodwill as of June 30, 2020.

Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital.

Based on the company’s quantitative evaluation of the partnership’s goodwill as of June 30, 2020, it was determined that the fair value of the partnership reporting unit exceeded its carrying value.

As a result, the company concluded that the goodwill assigned to the partnership reporting unit was not impaired, but could be at risk of future impairment.

Changes in the carrying amount of goodwill attributable to each business segment during the six months ended June 30, 2020 were as follows (in thousands):

During the first half of 2020, a decline in the partnership’s stock price resulted in a decrease in the partnership’s market capitalization.

As such, the company determined a triggering event had occurred that required an interim impairment assessment for both the three months ended March 31, 2020 as well as the three months ended June 30, 2020.

Significant assumptions inherent in the valuation methodologies for goodwill impairment testing were employed and include, but are not limited to, market capitalization, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital.

Based on the partnership’s quantitative evaluation as of June 30, 2020, it was determined that the fair value of the partnership reporting unit exceeded its carrying value, and the partnership concluded that the goodwill was not impaired, but could be at risk of future impairment.

During the three months ended September 30, 2020, the partnership did not identify any triggering events, and as such, no impairment assessment was deemed necessary.

Changes in the carrying amount of goodwill attributable to each business segment were as follows (in thousands):

Balance, December 31, 2019 (1)

Impairment charge

Balance, June 30, 2020

Balance, September 30, 2020 (1)

(1) The company records goodwill within “Other assets” on the consolidated balance sheets.

DERIVATIVE FINANCIAL INSTRUMENTS

At June 30, 2020, the company’s consolidated balance sheet reflected unrealized gains of $ 12.8 million, net of tax, in accumulated other comprehensive income which primarily related to our share of equity method investees other comprehensive income.

The company expects these gains will be reclassified as income from equity method investees, net of income taxes over the next 12 months as a result of hedged transactions that are forecasted to occur.

At September 30, 2020, the company’s consolidated balance sheet reflected unrealized losses of $ 10.9 million, net of tax, in accumulated other comprehensive income which primarily related to our share of equity method investees other comprehensive income.

The company expects these items will be reclassified as income from equity method investees, net of income taxes over the next 12 months as a result of hedged transactions that are forecasted to occur.

The amount realized in income from equity method investees, net of income taxes will differ as commodity prices change.

3 unchanged sentences

Liability Derivatives'

September 30,

Derivative financial instruments

Other liabilities

(1) At June 30, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $ 0.3 million .

(1) At December 31, 2019, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $ 3.4 million, which include $ 0.1 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments.

(3) At June 30, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 4.0 million .

(2) At September 30, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 9.6 million, which included $ 2.5 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.

Refer to Note 4 - Fair Value Disclosures , which contains fair value information related to derivative financial instruments.

4 unchanged sentences

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Comprehensive Income into Income

Cost of goods sold

Net income (loss) from discontinued operations, net of income taxes

Net gain (loss) recognized in loss before tax

Net loss from discontinued operations, net of income taxes

Net gain recognized in loss before income taxes

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

1 unchanged sentence

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Commodity contracts

5 unchanged sentences

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

as Hedging Instruments

5 unchanged sentences

Net loss from discontinued operations, net of income taxes

Net gain (loss) recognized in loss before tax

Net gain (loss) recognized in loss before income taxes

The following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the fair value hedged items (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

6 unchanged sentences

The effect of cash flow and fair value hedges and the line items on the consolidated statements of operations where they are reported are as follows (in thousands):

Location and Amount of Gain or (Loss) Recognized in

Location and Amount of Gain (Loss) Recognized in

Income on Cash Flow and Fair Value Hedging Relationships

for the Three Months Ended June 30,

Income (Loss) from Discontinued Operations, Net of Income Taxes

for the Three Months Ended September 30,

Net Income from Discontinued Operations, Net of Income Taxes

Gain (loss) on cash flow hedging relationships:

Commodity contracts:

Amount of gain (loss) reclassified from accumulated other comprehensive income into income

Amount of gain reclassified from accumulated other comprehensive income into income

Gain (loss) on fair value hedging relationships:

2 unchanged sentences

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

Location and Amount of Gain Recognized in

Location and Amount of Gain (Loss) Recognized in

Income on Cash Flow and Fair Value Hedging Relationships

for the Six Months Ended June 30,

Income (Loss) from Discontinued Operations, Net of Income Taxes

for the Nine Months Ended September 30,

Net Income from Discontinued Operations, Net of Income Taxes

Gain (loss) on cash flow hedging relationships:

5 unchanged sentences

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

There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the June 30, 2020 and 2019.

The open commodity derivative positions as of June 30, 2020, are as follows (in thousands):

There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the three and nine months ended September 30, 2020 and 2019.

The open commodity derivative positions as of September 30, 2020, are as follows (in thousands):

Exchange Traded (1)

3 unchanged sentences

Corn and Soybeans

Distillers Grains

(1) Exchange traded futures and options are presented on a net long and (short) position basis.

1 unchanged sentence

(2) Non-exchange traded forwards are presented on a gross long and (short) position basis including both fixed-price and basis contracts.

(3) Exchange traded f utures used for fair value hedges.

(3) Futures used for cash flow hedges.

(4) Futures or non-exchange traded forwards used for fair value hedges.

Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations.

Included in revenues are net losses on energy trading contracts of $ 0.1 million and net gains on energy trading contracts of $ 3.0 million for the three and six months ended June 30, 2020, respectively, and net gains on energy trading contracts of $ 0.8 million and $ 9.3 million for the three and six months ended June 30, 2019, respectively,

Included in revenues are net losses on energy trading contracts of $ 0.9 million and net gains on energy trading contracts of $ 2.1 million for the three and nine months ended September 30, 2020, respectively, and net gains on energy trading contracts of $ 2.1 million and $ 11.4 million for the three and nine months ended September 30, 2019, respectively.

The components of long-term debt are as follows (in thousands):

June 30, 2020

September 30, 2020

December 31, 2019

3 unchanged sentences

$ 135.0 million credit facility (3)

Green Plains Wood River and Green Plains Shenandoah:

$ 75.0 million delayed draw loan agreement (4)

Total book value of long-term debt

2 unchanged sentences

Total long-term debt

(1) Includes $ 1.7 million and $ 2.0 million of unamortized debt issuance costs as of June 30, 2020 and December 31, 2019, respectively.

(2) Includes $ 2.5 million and $ 2.8 million of unamortized debt issuance costs as of June 30, 2020 and December 31, 2019, respectively.

(3) The Green Plains Partners revolving credit facility was amended on June 4, 2020 and includes $ 3.1 million of unamortized debt issuance costs as of June 30, 2020.

(1) Includes $ 1.5 million and $ 2.0 million of unamortized debt issuance costs as of September 30, 2020 and December 31, 2019, respectively.

(2) Includes $ 2.4 million and $ 2.8 million of unamortized debt issuance costs as of September 30, 2020 and December 31, 2019, respectively.

(3) The Green Plains Partners revolving credit facility was amended on June 4, 2020 and includes $ 2.8 million of unamortized debt issuance costs as of September 30, 2020.

See below for further discussion.

The components of short-term notes payable and other borrowings are as follows:

June 30, 2020

(4) 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.

The delayed draw loan includes $ 0.3 million of unamortized debt issuance costs as of September 30, 2020.

The components of short-term notes payable and other borrowings are as follows (in thousands):

September 30, 2020

December 31, 2019

17 unchanged sentences

The redemption price will equal 100 % of the principal amount of the 4.00 % notes to be redeemed, plus any accrued 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.

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.

In August 2016, the company issued $ 170.0 million of 4.125 % convertible senior notes due in 2022, or the 4.125 % notes.

8 unchanged sentences

If an event of default occurs, it could result in the 4.125 % notes being declared due and payable.

Ethanol Production Segment

The company has small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.

Agribusiness and Energy Services Segment

1 unchanged sentence

The credit facility matures on July 28, 2022 and consists of a $ 285 million credit facility and a $ 15 million first-in-last-out (FILO) credit facility, and includes an accordion feature that enables the credit facility to be increased by up to $ 70.0 million with agent approval.

Advances are subject to variable interest rates equal to daily LIBOR plus 2.25 % on the credit facility and daily LIBOR plus 3.25 % on the FILO credit facility.

Advances are subject to variable interest rates equal

to daily LIBOR plus 2.25 % on the credit facility and daily LIBOR plus 3.25 % on the FILO credit facility.

The total unused portion of the revolving credit facility is also subject to a commitment fee of 0.375 % per annum.

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Capital expenditures are limited to $ 8.0 million per year under the credit facility, plus equity contributions from the company and unused amounts of up to $ 8.0 million from the previous year.

In addition, if

the company has long-term indebtedness on the date of calculation of greater than $ 10.0 million, the credit facility requires the company to maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 and a maximum long term debt capitalization of 40 %.

In addition, if the company has long-term indebtedness on the date of calculation of greater than $ 10.0 million, the credit facility requires the company to maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 and a maximum long term debt capitalization of 40 %.

Green Plains Grain has entered into short-term inventory financing agreements with a financial institution.

At June 30, 2020, 2.3 million bushels of corn had been designated as collateral under these agreements at initial values totaling $ 9.0 million.

At September 30, 2020, 1.3 million bushels of corn had been designated as collateral under these agreements at initial values totaling $ 5.6 million.

The company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the inventory.

At June 30, 2020, the short-term notes payable were valued at $ 9.5 million and were measured using Level 2 inputs.

At September 30, 2020, the short-term notes payable were valued at $ 5.9 million and were measured using Level 2 inputs.

Green Plains Commodity Management has an uncommitted $ 30.0 million revolving credit facility which matures April 30, 2023 to finance margins related to its hedging programs.

Advances are subject to variable interest rates equal to LIBOR plus 1.75 %.

Ethanol Production Segment

On September 3, 2020, Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of the company, entered into a delayed draw loan agreement with MetLife Real Estate Lending LLC.

The $ 75.0 million delayed draw loan matures on September 1, 2035 and is secured by substantially all of the assets of the Wood River and Shenandoah facilities.

The proceeds from the loan will be used to add high protein processing systems at the Wood River and Shenandoah facilities as well as other capital expenditures.

The delayed draw loan bears interest at a fixed rate of 5.02 %, plus an interest rate premium of 1.5 % until the loan is fully drawn, which must occur within the 18 month draw period.

After the earlier of the 18 month draw period or the loan being fully drawn, the interest rate premium may be adjusted quarterly from 0.00 % to 1.50 % based on the leverage ratio of total funded debt to EBITDA of Wood River and Shenandoah.

Principal payments of $ 1.5 million per year begin 24 months from the closing date.

Prepayments are prohibited until September 2024.

Financial covenants of the delayed draw loan agreement include a minimum loan to value ratio of 50 %, a minimum fixed charge coverage ratio of 1.25 x commencing on June 30, 2021, a total debt service reserve of six months of future principal and interest payments and a minimum working capital requirement at Green Plains of not less than $ 0.10 per gallon of nameplate capacity or $ 112.3 million.

The loan is guaranteed by the company and has certain limitations on distributions, dividends or loans to Green Plains by Wood River and Shenandoah unless immediately after giving effect to such action, there will not exist any event of default.

The company also has small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.

Partnership Segment

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The amended credit facility includes a $ 130.0 million term loan and a $ 5.0 million revolver, and matures on December 31, 2021 .

The term loan requires a principal payment of $ 7.5 million on July 15, 2020 and $ 2.5 million in monthly principal payments beginning August 15, 2020, with a step up to monthly payments of $ 3.2 million beginning May 15, 2021.

The partnership made $ 12.5 million in principal payments on the term loan during the three and nine months ended September 30, 2020.

Monthly principal payments of $ 2.5 million are required October 15, 2020 through April 15, 2021, with a step up to monthly payments of $ 3.2 million beginning May 15, 2021 through maturity.

In addition, if at any time subsequent to July 15, 2020, the partnership’s cash balance exceeds $ 2.5 million for more than five consecutive business days, prepayments of outstanding principal are required in an amount equal to the excess cash.

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The unused portion of the revolver is also subject to a commitment fee of 0.50 %.

As of June 30, 2020, the term loan had a balance of $ 130.0 million and an interest rate of 6.25% and the revolver was unused.

The credit facility also allows for swing line loans subject to the revolver availability.

Swing line loans are subject to a floating interest rate based on the Prime Rate plus 3.5 % to 4.25 % dependent upon the preceding fiscal quarter’s consolidated leverage ratio.

As of June 30, 2020, there were no outstanding swing line loans.

Under the terms of the credit facility, swing line loans must be repaid within 10 days of the date of the advance.

As of September 30, 2020, the term loan had a balance of $ 117.5 million and an interest rate of 6.00 % and the revolver had a balance outstanding of $ 0.7 million at an interest rate of 7.25 %.

The partnership’s obligations under the credit facility are secured by a first priority lien on (i) the equity interests of the partnership’s present and future subsidiaries, (ii) all of the partnership’s present and future personal property, such as investment property, general intangibles and contract rights, including rights under any agreements with Green Plains Trade, and (iii) all proceeds and products of the equity interests of the partnership’s present and future subsidiaries and its personal property and (iv) substantially all of the partnership’s real property and material leases of real property.

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Under the amended terms of the credit facility, the partnership may make quarterly distribution payments in an aggregate amount not to exceed $ 0.12 per outstanding unit, so long as (i) no default has occurred and is continuing, or would result from payment of the distribution, and (ii) the partnership and its subsidiaries are in compliance with its financial covenants and remain in compliance after payment of the distribution.

The credit facility is not guaranteed by the company.

Covenant Compliance

The company was in compliance with its debt covenants as of June 30, 2020.

The company was in compliance with its debt covenants as of September 30, 2020.

Restricted Net Assets

At June 30, 2020, there were approximately $ 66.4 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.

At September 30, 2020, there were approximately $ 67.5 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.

STOCK-BASED COMPENSATION

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Restricted Stock Awards and Deferred Stock Units

The non-vested stock award and deferred stock unit activity for the six months ended June 30, 2020, is as follows:

The non-vested stock award and deferred stock unit activity for the nine months ended September 30, 2020, is as follows:

‎ Deferred Stock

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Non-Vested at December 31, 2019

Non-Vested at June 30, 2020

Non-Vested at September 30, 2020

Performance Shares

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These performance shares vest based on the level of achievement of certain performance goals, including the incremental value achieved from the company’s high-protein initiatives, annual production levels and return on investment (ROI).

Performance shares granted in 2020 do not contain market based factors requiring a Monte Carlo valuation model.

The performance shares were granted at a target of 100 %, but each performance share will reduce or increase depending on results for the performance period.

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The performance shares were granted at a target of 100 %, but each performance share will reduce or increase depending on results for the performance period for the company's RONA, and the company’s TSR relative to that of the performance peer group.

If the company’s RONA and TSR achieve the maximum goals, the maximum amount of shares available to be

issued pursuant to the 2018 and 2019 awards are 428,104 performance shares or 150 % of the 285,403 performance shares which remain outstanding.

If the company’s RONA and TSR achieve the maximum goals, the maximum amount of shares available to be issued pursuant to the 2018 and 2019 awards are 428,104 performance shares or 150 % of the 285,403 performance shares which remain outstanding.

The actual number of performance shares that will ultimately vest is based on the actual percentile ranking of the company’s RONA, and the company’s TSR compared to the peer performance at the end of the performance period.

The company used the Monte Carlo valuation model to estimate the fair value of the performance shares on the date of the grant.

The weighted average assumptions used by the company in applying the Monte Carlo valuation model for performance share grants are illustrated in the following table:

FY 2019 Performance Awards

For performance shares which include market based factors, the company uses the Monte Carlo valuation model to estimate the fair value of the performance shares on the date of the grant.

The weighted average assumptions used by the company in applying the Monte Carlo valuation model for performance share grants and related valuation are illustrated in the following table:

Performance Awards

FY 2018 Performance Awards

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Closing stock price on the date of grant

The non-vested performance share award activity for the six months ended June 30, 2020, is as follows:

The non-vested performance share award activity for the nine months ended September 30, 2020, is as follows:

‎ Average Grant-

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Non-Vested at December 31, 2019

Non-Vested at June 30, 2020

Non-Vested at September 30, 2020

Stock Options

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The expected life of the options is the period of time the options are expected to be outstanding.

The company did no t grant any stock option awards during the six months ended June 30, 2020 and 2019.

The activity related to the exercisable stock options for the six months ended June 30, 2020, is as follows:

The company did no t grant any stock option awards during the nine months ended September 30, 2020 and 2019.

The activity related to the exercisable stock options for the nine months ended September 30, 2020, is as follows:

Weighted-Average

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Outstanding at December 31, 2019

Outstanding at June 30, 2020

Exercisable at June 30, 2020

Outstanding at September 30, 2020

Exercisable at September 30, 2020

Green Plains Partners

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The partnership records noncash compensation expense related to the awards over the requisite service period on a straight-line basis.

The non-vested unit-based awards activity for the six months ended June 30, 2020, is as follows:

The non-vested unit-based awards activity for the nine months ended September 30, 2020, is as follows:

‎ Deferred Stock

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Non-Vested at December 31, 2019

Non-Vested at June 30, 2020

Non-Vested at September 30, 2020

Stock-Based and Unit Based Compensation Expense

Compensation costs for stock-based and unit-based payment plans were $ 2.3 million and $ 3.6 million for the three and six months ended June 30, 2020, respectively, and $ 2.3 million and $ 4.8 million for the three and six months ended June 30, 2019.

At June 30, 2020, there was $ 13.6 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards.

Compensation costs for stock-based and unit-based payment plans were $ 2.1 million and $ 5.7 million for the three and nine months ended September 30, 2020, respectively, and $ 2.6 million and $ 7.4 million for the three and nine months ended September 30, 2019.

At September 30, 2020, there was $ 11.7 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 1.8 years.

The pote ntial tax benefit related to stock-based payment is approximately 24.2 % of these expe nses .

The potential tax benefit related to stock-based payment is approximately 24.2 % of these expe nses .

EARNINGS PER SHARE

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Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Net loss from continuing operations (1)

Net income (loss) from discontinued operations

Net income from discontinued operations

Net loss attributable to Green Plains

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STOCKHOLDERS’ EQUITY

Components of stockholders’ equity for the three and six months ended June 30, 2020 and 2019 are as follows (in thousands):

Components of stockholders’ equity for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):

Treasury Stock

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Balance, June 30, 2020

Net income (loss)

Distributions declared

Other comprehensive loss

‎ before reclassification

Amounts reclassified from

‎ accumulated other

‎ comprehensive loss

Other comprehensive income,

Share of equity method investees other comprehensive loss arising during the period, net of tax

Stock-based compensation

Balance, September 30, 2020

Treasury Stock

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Balance, June 30, 2019

Net income (loss)

Cash dividends and

‎ distributions declared

Other comprehensive loss

‎ before reclassification

Amounts reclassified from

‎ accumulated other

‎ comprehensive loss

Other comprehensive income,

Share of equity method investees other comprehensive loss arising during the period, net of tax

Issuance of 4.00 % convertible notes due 2024, net of tax

Repurchase of common stock

Stock-based compensation

Balance, September 30, 2019

(1) During the three months ended March 31, 2019, the company received $ 6.7 million from a shareholder of the company for disgorgement of shareholder short-swing profits under Section 16(b) under the Exchange Act.

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Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Statements of

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Total gains on cash flow hedges from continuing operations

Income (losses) on cash flow hedges from discontinued operations

Income tax benefit (expense)

Income on cash flow hedges from discontinued operations, net of income taxes

Income tax expense

Amounts reclassified from accumulated other comprehensive income (loss)

(2) Costs of goods sold

(3) Loss from continuing operations before income taxes and income (loss) from equity method investees

(4) Net income (loss) from discontinued operations, net of income taxes

(5) Income tax benefit

(3) Loss from continuing operations before income taxes and income from equity method investees

(4) Net income from discontinued operations, net of income taxes

(5) Income tax benefit (expense)

The company records actual income tax expense or benefit during interim periods rather than on an annual effective tax rate method.

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The CARES Act also contains an employee retention credit to encourage employers to maintain headcounts even if employees cannot report to work because of issues related to the COVID-19.

In the first quarter, the company recorded an income tax benefit related to the expected NOL carry back claim of $ 28.4 million which was an estimate based on the amount of NOL rated to the 2019 year-end tax provision.

In the second quarter, the company filed its preliminary 2019 federal income tax return, as well as a refund claim with the IRS to carry back our 2019 NOL to prior years.

The company recorded an additional income tax benefit of approximately $ 5.5 million during the second quarter related to the CARES Act in addition to adjustments to certain valuation allowances.

In the first quarter the company recorded an income tax benefit related to the expected NOL carry back claim of $ 28.4 million which was an estimate based on the amount of NOL rated to the 2019 year-end tax provision.

The company recorded income tax benefit of $ 11.5 million and $ 55.7 million for the three and six months ended June 30, 2020, compared with $ 15.3 million and $ 28.3 million for the same periods in 2019.

The decrease in the amount of income tax benefit recorded for the three months ended June 30, 2020 as compared to the same period in 2019 was primarily due to an increase in pretax income offset by the tax benefit for the utilization of previously recorded tax NOLs in the three month period ended June 30, 2020 as allowed under the provisions of the recently enacted CARES Act.

The increase in the amount of the tax benefit recorded for the six months ended June 30, 2020 compared to the same period in 2019 was to record the tax benefit associated with the carry back of the tax NOL generated in 2019 to the 2014 tax year under the newly enacted CARES Act, as well as the release of a previously recorded valuation allowance against the 2019 NOL and other deferred tax assets.

The amount of unrecognized tax benefits for uncertain tax positions was $ 51.6 million as of June 30, 2020 and December 31, 2019.

In the third quarter no additional tax benefit was recorded related to the CARES Act.

The company recorded income tax expense of $ 7.3 million and income tax benefit of $ 48.5 million for the three and nine months ended September 30, 2020, compared with income tax benefit of $ 12.5 million and $ 40.7 million for the same periods in 2019.

The income tax expense recorded for the three months ended September 30, 2020, as compared to income tax benefit for the same period in 2019, was primarily due to the recording of a valuation allowance against increases in deferred tax assets in the third quarter.

The increase in the amount of the tax benefit recorded for the nine months ended September 30, 2020 compared to the same period in 2019 was to record the tax benefit in 2020 associated with the carry back of the tax NOL generated in 2019 to the 2014 tax year under the newly enacted CARES Act, offset by the release of a previously recorded valuation allowance against the 2019 NOL and other deferred tax assets.

The amount of unrecognized tax benefits for uncertain tax positions was $ 51.6 million as of September 30, 2020 and December 31, 2019.

The 2020 effective tax rate can be affected by variances in the estimates and amounts of taxable income among the various states, entities and activity types, realization of tax credits, adjustments from resolution of tax matters under review, valuation allowances and the company’s assessment of its liability for uncertain tax positions.

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Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Lease expense

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Total lease expense

(1) Represents amounts incurred in excess of the minimum payments required 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.

(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.

Supplemental cash flow information related to operating leases is as follows (in thousands):

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Cash paid for amounts included in the measurement of lease liabilities:

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Operating leases

Right-of-use assets and lease obligations derecognized due to lease modifications:

Operating leases

Supplemental balance sheet information related to operating leases is as follows:

June 30, 2020

September 30, 2020

December 31, 2019

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Lease liabilities

The partnership has additional railcar operating leases that will commence in the second half of 2020 and first half of 2021 to replace expiring leases, with estimated future minimum lease commitments of approximately $ 26.6 million and lease terms of five years .

The partnership has additional railcar operating leases that will commence in the fourth quarter of 2020 and the first half of 2021 to replace expiring leases, with estimated future minimum lease commitments of approximately $ 24.5 million and lease terms of five to six years .

Additionally, the company has an operating lease for a building commencing during the fourth quarter of 2020 with estimated future minimum lease commitments of approximately $ 1.2 million and a lease term of five years .

The undiscounted amounts are not included in the tables above.

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Refer to Note 2 – Revenue for further discussion on lease revenue.

As of June 30, 2020, the company had contracted future purchases of grain, corn oil, natural gas, ethanol and distillers grains, valu ed at approximately $ 158.4 million.

As of September 30, 2020, the company had contracted future purchases of grain, corn oil, natural gas, ethanol and distillers grains, valued at approximately $ 187.9 million.

The company is currently involved in litigation that has arisen during the ordinary course of business, but does not believe any pending litigation will have a material adverse effect on its financial position, results of operations or cash flows.

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The company provides a variety of shared services to GPCC, including accounting and finance, payroll and human resources, information technology, legal, communications and treasury activities.

The shared services provided by the company and billed to GPCC were $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2020, respectively.

The company had $ 1.4 million and $ 2.2 million outstanding receivables related to the shared service agreement and expenses paid on behalf of GPCC as of June 30, 2020 and December 31, 2019, respectively.

The shared services provided by the company and billed to GPCC were $ 0.4 million and $ 1.2 million for the three and nine months ended September 30, 2020, respectively, and $ 0.1 million for the three and nine months ended September 30, 2019.

The company had $ 1.5 million and $ 2.2 million of outstanding receivables related to the shared service agreement and expenses paid on behalf of GPCC as of September 30, 2020 and December 31, 2019, respectively.

As of September 30, 2020, the company also had an additional $ 2.0 million outstanding receivable related to the GPCC bonus provision.

Green Plains Trade Group, a subsidiary of the company, enters into certain sale contracts with GPCC during the normal course of business.

Revenues were $ 3.1 million and $ 6.0 million for the three and six months ended June 30, 2020, respectively.

Revenues were $ 2.2 million and $ 8.2 million for the three and nine months ended September 30, 2020, respectively, and $ 0.7 million for both the three and nine months ended September 30, 2019.

Ejnar Knudsen, a member of the company’s board of directors, has an indirect ownership interest in GPCC of 0.0736 % by reason of his ownership in TGAM Agribusiness Fund LP.

Based on the purchase price, the value of that ownership interest is approximately $ 0.1 million.

Knudsen also is the CEO and partial owner of AGR Partners LLC which provides investment advisory services to TGAM Agribusiness Fund LP pursuant to a sub-advisory agreement between AGR Partners LLC and Nuveen Alternative Advisors LLC, which is the investment manager for TGAM Agribusiness Fund LP.

Aircraft Leases

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Flight time in excess of 125 hours per year will incur additional hourly charges.

Payments related to these leases totaled $ 0 and $ 24 thousand during the three and six months ended June 30, 2020, respectively, and $ 35 thousand and $ 69 thousand during the three and six months ended June 30, 2019, respectively.

The company had $ 0 in outstanding payables related to these agreements as of June 30, 2020 and $ 17 thou sand in outstanding payables related to these agreements as of December 31, 2019.

Given the limited amount of travel during the nine months ended September 30, 2020, the companies have agreed to defer the monthly payment until excess carryover hours are used.

Once those hours are utilized, the companies will re-evaluate its arrangements.

Payments related to these leases totaled $ 6 thousand and $ 30 thousand during the three and nine months September 30, 2020, respectively, and $ 37 thousand and $ 106 thousand during the three and nine months ended September 30, 2019, respectively.

The company had $ 0 in outstanding payables related to these agreements as of September 30, 2020 and $ 17 thou sand in outstanding payables related to these agreements as of December 31, 2019.

EQUITY METHOD INVESTMENTS

Green Plains Cattle Company LLC

On September 9, 2019, Green Plains, TGAM and StepStone announced the formation of a joint venture.

Such parties entered into the Second Amended and Restated Limited Liability Company Agreement of GPCC effective as of September 1, 2019.

On September 1, 2019, Green Plains, TGAM and StepStone entered into the Second Amended and Restated Limited Liability Company Agreement of GPCC.

GPCC was previously a wholly owned subsidiary of Green Plains.

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In addition, although the company has the ability to exercise significant influence over the joint venture through board representation and voting rights, all significant decisions require the consent of the other investors without regard to economic interest.

Subsequent to September 30, 2020, the company sold its remaining interest in GPCC.

Refer to Note 17 – Subsequent Events for further discussion.

Summarized Financial Information

Our equity method investments are summarized in the following table (in thousands):

Ownership as of June 30, 2020

June 30, 2020

Our equity method investments are summarized in the following tables (in thousands):

Ownership as of September 30, 2020

September 30, 2020

December 31, 2019

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(1) The equity method investment in GPCC is impacted by the effect of deferred gains or losses on cattle sale contracts designated in a cash flow hedge relationship.

Pre-tax accumulated other comprehensive loss for GPCC was $ 17.1 million as of June 30, 2020 compared to pre-tax accumulated other comprehensive loss of $ 16.2 million as of December 31, 2019.

Pre-tax accumulated other comprehensive loss for GPCC was $ 10.7 million as of September 30, 2020 compared to pre-tax accumulated other comprehensive loss of $ 16.2 million as of December 31, 2019.

Earnings from equity method investments were as follows:

Three Months Ended

Six Months Ended

‎ September 30,

Nine Months Ended

‎ September 30,

Green Plains Cattle Company LLC (1)

Total income (loss) from equity method investments, net of income taxes

Total income from equity method investments, net of income taxes

Distributions from equity method investments

Income (loss) from equity method investments, net of distributions

(1) Pre-tax equity method earnings of GPCC were $ 15.6 million and $ 26.0 million for the three and six months ended June 30, 2020.

(1) Pre-tax equity method earnings of GPCC were $ 1.0 million and $ 27.0 million for the three and nine months ended September 30, 2020, respectively and $ 0.5 million for both the three and nine months September 30, 2019.

GPCC equity method treatment began on September 1, 2019, and as such, the prior year balances above represent balances for the one-month period ending September 30, 2019.

The company reports its proportional share of equity method investment income (loss) in the consolidated statements of operations.

The company’s share of equity method investees other comprehensive income arising during the period is included in accumulated other comprehensive income (loss) in the accompanying balance sheet.

The company’s share of equity method investees other comprehensive income arising during the period is included in accumulated other comprehensive loss in the accompanying balance sheet.

The following table present summarized information of GPCC.

Three Months Ended

June 30, 2020

Six Months Ended

June 30, 2020

‎ September 30,

Nine Months Ended

‎ September 30,

Total revenues

Total operating expenses

June 30, 2020

(1) GPCC equity method treatment began on September 1, 2019, as such balances for the three and nine month periods above represent summarized financials for the one-month period ending September 30, 2019.

September 30, 2020

December 31, 2019

4 unchanged sentences

Noncurrent liabilities

SUBSEQUENT EVENTS

Disposition of Equity Interest in Green Plains Cattle Company LLC

On October 9, 2020, pursuant to the Securities Purchase Agreement, the company sold its remaining 50 % joint venture interest in GPCC to AGR Special Opportunities Fund I, LP, TGAM Agribusiness Fund LP and StepStone (the “Buyers”) for $ 80.5 million in cash, plus closing adjustments.

The transaction was effective on October 1, 2020, and will result in a reduction in other assets of $ 69.7 million as a result of removal of the equity method investment in GPCC, and a reduction in accumulated other comprehensive income of $ 10.7 million as a result of the removal of the company’s share of equity method investees accumulated other comprehensive loss.

Transaction fees related to the disposal were not material.

There was no material gain or loss recorded as part of this transaction.

The Securities Purchase Agreement contains certain earn-out provisions to be paid to or received from the Buyers if certain EBITDA thresholds are met.

The company will record any contingent amounts associated with the earn-out provision in the consolidated financial statements when the amount is probable and reasonably determinable or the consideration is realized.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements