4 unchanged sentences
(in thousands, except share amounts)
−Removed: September 30,
Current assets
9 unchanged sentences
Operating lease right-of-use assets
−Removed: Investment in equity method investees
LIABILITIES AND STOCKHOLDERS'
20 unchanged sentences
Accumulated other comprehensive loss
−Removed: Treasury stock, 11,813,161 and 10,932,182 shares, respectively
+Added: Treasury stock, 11,813,161 shares
Total Green Plains stockholders'
8 unchanged sentences
Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
Product revenues
5 unchanged sentences
Selling, general and administrative expenses
+Added: Gain on sale of assets, net
Goodwill impairment
−Removed: Gain on sale of asset
Depreciation and amortization expenses
Total costs and expenses
−Removed: Operating loss from continuing operations
+Added: Operating income (loss)
Other income (expense)
2 unchanged sentences
Total other expense
−Removed: Loss from continuing operations before income taxes and income from equity method investees
+Added: Loss before income taxes and income from equity method investees
Income tax benefit (expense)
Income from equity method investees, net of income taxes
−Removed: Net loss from continuing operations including noncontrolling interest
−Removed: Net income from discontinued operations, net of income taxes
Net income attributable to noncontrolling interests
Net loss attributable to Green Plains
−Removed: Earnings per share - basic and diluted
−Removed: Net loss from continuing operations
−Removed: Net income from discontinued operations
−Removed: Net loss attributable to Green Plains
+Added: Earnings per share:
+Added: Net loss attributable to Green Plains - basic and diluted
Weighted average shares outstanding:
+Added: Basic and diluted
See accompanying notes to the consolidated financial statements.
4 unchanged sentences
Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
Other comprehensive income (loss), net of tax:
4 unchanged sentences
Total other comprehensive income (loss), net of tax
−Removed: Comprehensive loss
+Added: Comprehensive income (loss)
Comprehensive income attributable to noncontrolling interests
−Removed: Comprehensive loss attributable to Green Plains
+Added: Comprehensive income (loss) attributable to Green Plains
See accompanying notes to the consolidated financial statements.
3 unchanged sentences
(unaudited and in thousands)
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Cash flows from operating activities:
−Removed: Net loss from continuing operations including noncontrolling interest
−Removed: Net income from discontinued operations, net of income taxes
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
1 unchanged sentence
Amortization of debt issuance costs and debt discount
−Removed: Goodwill impairment
Gain on sale of assets, net
+Added: Loss on extinguishment of convertible notes
+Added: Goodwill impairment
Deferred income taxes
1 unchanged sentence
Income from equity method investees, net of income taxes
−Removed: Distribution from equity method investments
+Added: Distribution from equity method investees, net of income taxes
Changes in operating assets and liabilities before effects of business combinations and dispositions:
4 unchanged sentences
Current income taxes
−Removed: Net cash provided by (used in) operating activities - continuing operations
−Removed: Net cash provided by operating activities - discontinued operations
Net cash provided by (used in) operating activities
1 unchanged sentence
Purchases of property and equipment, net
−Removed: Proceeds from the sale of discontinued operations, net of cash divested
Proceeds from the sale of assets, net
Other investing activities
−Removed: Net cash provided by (used in) investing activities - continuing operations
−Removed: Net cash used in investing activities - discontinued operations
Net cash provided by (used in) investing activities
4 unchanged sentences
Payments on short-term borrowings
−Removed: ( 1,866,526 )
−Removed: ( 2,070,273 )
+Added: Payments on extinguishment of convertible debt
Payments for repurchase of common stock
−Removed: Payments of cash dividends and distributions
−Removed: Proceeds from disgorgement of shareholder short-swing profits
+Added: Payments of cash distributions
+Added: Proceeds from issuance of common stock, net
Payments of loan fees
Payments related to tax withholdings for stock-based compensation
−Removed: Net cash used in financing activities - continuing operations
−Removed: Net cash used in financing activities - discontinued operations
−Removed: Net cash used in financing activities
+Added: Other financing activities
+Added: Net cash provided by (used in) financing activities
Net change in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
−Removed: Discontinued operations cash activity included above:
−Removed: Cash balance included in current assets of discontinued operations at beginning of period
Cash, cash equivalents and restricted cash, end of period
5 unchanged sentences
Continued from the previous page
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended
Reconciliation of total cash, cash equivalents and restricted cash:
2 unchanged sentences
Total cash, cash equivalents and restricted cash
+Added: Supplemental investing activities:
Assets disposed of in sale
−Removed: liabilities disposed
+Added: liabilities relinquished
Net assets disposed
Supplemental disclosures of cash flow:
−Removed: Cash paid (refunded) for income taxes
−Removed: Cash paid for interest of continuing operations
−Removed: Cash paid for interest of discontinued operations
+Added: Cash refunded for income taxes
+Added: Cash paid for interest
+Added: Cash premium paid for extinguishment of convertible notes
See accompanying notes to the consolidated financial statements.
15 unchanged sentences
The assets of the partnership cannot be used by the company for general corporate purposes.
−Removed: 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.
−Removed: 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.
+Added: The partnership’s consolidated total assets as of March 31, 2021 and December 31, 2020, excluding intercompany balances, are $ 91.3 million and $ 91.2 million, respectively, and primarily consist of property and equipment, operating lease right-of-use assets and goodwill .
+Added: The partnership’s consolidated total liabilities as of March 31, 2021 and December 31, 2020, excluding intercompany balances, are $ 116.0 million and $ 151.2 million, respectively, which primarily consist of current maturities 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 our general assets.
−Removed: GPCC, a previously a wholly owned subsidiary of Green Plains, was disposed of during the third quarter of 2019.
−Removed: 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.
−Removed: Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”) to be presented as discontinued operations.
−Removed: As such, GPCC results prior to its disposition are classified as discontinued operations in prior period consolidated financial statements.
−Removed: See Note 3 - Dispositions and Discontinued Operations and Note 17 – Subsequent Events for further details.
−Removed: 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.
+Added: The company also owns a majority interest in BioProcess Algae, a joint venture formed in 2008 as well as a majority interest in Fluid Quip Technologies, LLC with their results being consolidated in our 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.
5 unchanged sentences
Certain prior year amounts have been reclassified to conform to the current year presentation.
−Removed: These reclassifications did not affect total revenues, costs and expenses, net income or stockholders’ equity.
−Removed: Revision of Previously Issued Financial Statements
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: These reclassifications did not affect total revenues, costs and expenses or net income.
+Added: See Note 8 – Debt and Note 11 – Stockholders’ Equity for further details.
Use of Estimates in the Preparation of Consolidated Financial Statements
2 unchanged sentences
Actual results could differ from those estimates.
−Removed: Key accounting policies, including but not limited to those relating to revenue recognition, operating leases, impairment of long-lived assets and goodwill, derivative financial instruments and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.
+Added: Key accounting policies, including but not limited to those relating to revenue recognition, carrying value of intangible assets, operating leases, impairment of long-lived assets and goodwill, derivative
+Added: financial instruments, accounting for income taxes and assets acquired and liabilities assumed in acquisitions, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.
Description of Business
1 unchanged sentence
(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.
+Added: The food and ingredients segment, had no activity during the three months ended March 31, 2021 and 2020.
Cash and Cash Equivalents
1 unchanged sentence
Restricted Cash
−Removed: The company has restricted cash, which can only be used for funding letters of credit or for payment towards a revolving credit agreement.
+Added: The company has restricted cash, which can only be used for funding letters of credit, for payment towards a revolving credit agreement, or for capital expenditures as specified in certain credit facility agreements.
Restricted cash also includes cash margins and securities pledged to commodity exchange clearinghouses and at times, funds in escrow related to acquisition and disposition activities.
18 unchanged sentences
Revenues from grain storage are recognized over time as the services are rendered.
+Added: Revenues related to the design, engineering and installation of equipment are recognized over the term of the related contracts as equipment is delivered and installed and services are performed.
A substantial portion of the partnership revenues are derived from fixed-fee commercial agreements for storage, terminal or transportation services.
The partnership recognizes revenue upon transfer of control of product from its storage tanks and fuel terminals, when railcar volumetric capacity is provided, and as truck transportation services are performed.
−Removed: To the extent shortfalls associated with minimum volume commitments in the previous four quarters continue to exist, volumes in excess of the minimum volume commitment are applied to those shortfalls.
+Added: To the extent shortfalls associated with minimum volume commitments in the previous four quarters continue to exist, volumes in excess
+Added: of the minimum volume commitment are applied to those shortfalls.
Remaining excess volumes generating operating lease revenue are recognized as incurred.
13 unchanged sentences
The company is exposed to loss when counterparties default on forward purchase and sale contracts.
−Removed: Grain inventories held for sale and forward purchase and sale contracts are valued at market prices when available or other market quotes adjusted for differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based.
+Added: Grain inventories held for sale and forward purchase and sale contracts are valued at market prices when available or other market quotes adjusted for basis differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based.
Changes in forward purchase contracts and exchange-traded futures and options contracts are recognized as a component of cost of goods sold.
3 unchanged sentences
Derivative Financial Instruments
−Removed: The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes including but not limited to, corn, ethanol, natural gas and crude oil.
+Added: The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes including but not limited to, corn, ethanol, natural gas, soybean meal and soybean oil.
The company monitors and manages this exposure as part of its overall risk management policy to reduce the adverse effect market volatility may have on its operating results.
10 unchanged sentences
Certain qualifying derivatives related to ethanol production and agribusiness and energy services are designated as cash flow hedges.
−Removed: The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow hedges.
+Added: The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow
Unrealized gains and losses are reflected in accumulated other comprehensive income or loss until the gain or loss from the underlying hedged transaction is realized and the physical transaction is completed.
3 unchanged sentences
The carrying amount of the hedged inventory is adjusted in the current period for changes in fair value.
+Added: Estimated fair values carried at market are based on exchange-quoted prices, adjusted as appropriate for regional location basis values which represent differences in local markets including transportation as well as quality or grade differences.
+Added: Basis values are generally determined using inputs from broker quotations or other market transactions.
+Added: However a portion of the value may be derived using unobservable inputs.
Ineffectiveness of the hedges is recognized in the current period to the extent the change in fair value of the inventory is not offset by the change in fair value of the derivative.
Recent Accounting Pronouncements
+Added: On January 1, 2021, the company early adopted the 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.
+Added: The adoption of this guidance resulted in a $ 49.5 million decrease in additional paid-in capital, an $ 11.4 million increase in retained earnings and a $ 38.1 million increase in long-term debt, which included a $ 39.4 million increase in debt principal offset by a $ 1.3 million increase in debt issuance costs, resulting from amounts previously bifurcated to equity being reclassified to debt.
+Added: See Note 8 – Debt and Note 11 – Stockholders’ Equity for further details.
+Added: In March 2020, the FASB issued amended guidance in ASC 848, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, and a subsequent update in January 2021, which provides optional expedients and exceptions to U.S.
+Added: GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates.
+Added: The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.
+Added: The guidance is effective upon issuance and to be applied prospectively from any date beginning March 12, 2020 through December 31, 2022.
+Added: The amended guidance is not expected to have a material impact on the company’s consolidated financial statements.
In December 2019, the FASB issued amended guidance in ASC 740, Income Taxes - Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 74 0.
4 unchanged sentences
The company is evaluating the impact of this standard on its consolidated financial statements.
−Removed: In March 2020, the FASB issued amended guidance in ASC 848, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to U.S.
−Removed: GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates.
−Removed: The expedients and exceptions provided by the amended guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.
−Removed: The guidance is effective upon issuance and to be applied prospectively from any date beginning March 12, 2020 through December 31, 2022.
−Removed: The amended guidance is not expected to have a material impact on the company’s consolidated financial statements.
−Removed: 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 .
−Removed: 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.
−Removed: The amended guidance also enhances transparency and improves disclosures for convertible instruments and earnings per share guidance.
−Removed: The amended guidance is effective for fiscal periods beginning after December 15, 2021, including interim periods within those fiscal periods.
−Removed: Early adoption is permitted, but no earlier than fiscal periods beginning after December 15, 2020.
−Removed: The amended guidance permits the use of either the modified retrospective or fully retrospective method of transition.
−Removed: 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
5 unchanged sentences
The following tables disaggregate revenue by major source (in thousands):
−Removed: Three Months Ended September 30, 2020
−Removed: Ethanol Production
−Removed: Agribusiness & Energy Services
−Removed: Food & Ingredients
−Removed: Revenues from contracts with customers under ASC 606:
−Removed: Distillers grains
−Removed: Service revenues
−Removed: Intersegment revenues
−Removed: Total revenues from contracts with customers
−Removed: Revenues from contracts accounted for as derivatives under ASC 815 (1) :
−Removed: Distillers grains
−Removed: Intersegment revenues
−Removed: Total revenues from contracts accounted for as derivatives
−Removed: Leasing revenues under ASC 842 (2) :
−Removed: Total Revenues
−Removed: Nine Months Ended September 30, 2020
−Removed: Ethanol Production
−Removed: Agribusiness & Energy Services
−Removed: Food & Ingredients
−Removed: Revenues from contracts with customers under ASC 606:
−Removed: Distillers grains
−Removed: Service revenues
−Removed: Intersegment revenues
−Removed: Total revenues from contracts with customers
−Removed: Revenues from contracts accounted for as derivatives under ASC 815 (1) :
−Removed: Distillers grains
−Removed: Intersegment revenues
−Removed: Total revenues from contracts accounted for as derivatives
−Removed: Leasing revenues under ASC 842 (2) :
−Removed: Total Revenues
−Removed: Three Months Ended September 30, 2019
+Added: Three Months Ended March 31, 2021
Ethanol Production
Agribusiness & Energy Services
−Removed: Food & Ingredients
Revenues from contracts with customers under ASC 606:
9 unchanged sentences
Total Revenues
−Removed: Nine Months Ended September 30, 2019
+Added: Three Months Ended March 31, 2020
Ethanol Production
Agribusiness & Energy Services
−Removed: Food & Ingredients
Revenues from contracts with customers under ASC 606:
12 unchanged sentences
Major Customers
−Removed: 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.
−Removed: Revenue from Customer B represented 11 % and 10 % of total revenues for the three and nine months ended September 30, 2019, respectively.
−Removed: Revenues from these customers are reported in the ethanol production segment.
−Removed: DISPOSITIONS AND DISCONTINUED OPERATIONS
−Removed: Disposition of Green Plains Cattle Company LLC
−Removed: On September 1, 2019, the company, TGAM Agribusiness Fund Holdings-B LP (“TGAM”) and StepStone Atlantic Fund, L.P.
−Removed: (“StepStone”) formed a joint venture and entered into a LLC Agreement.
−Removed: GPCC was previously a wholly owned subsidiary of Green Plains.
−Removed: 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.
−Removed: There was no gain or loss recorded as part of this initial transaction.
−Removed: The LLC Agreement contained certain earn-out or bonus provisions to be paid by or received from GPCC if certain EBITDA thresholds were met.
−Removed: 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.
−Removed: Under the LLC Agreement, Green Plains has certain rights and obligations, including but not limited to, the right or obligation:
−Removed: (i) to designate two Managers to the Board of Managers of GPCC (the “Board”), or in the event the size of the Board is increased, the number of Managers equal to two-fifths of the Board, rounded up, and (ii) to fund additional capital contributions in accordance with their percentage interest upon mutual agreement by Green Plains, TGAM and StepStone.
−Removed: Additionally, TGAM and StepStone both have the right or obligation to designate one Manager, or in the event the size of the Board is increased, the number of Managers equal to one-fifths of the Board, rounded up.
−Removed: Each Manager serving on the Board shall have one vote and a majority of the Managers serving on the Board shall constitute a quorum for the transaction of business of the Board.
−Removed: Green Plains’ allocation under the LLC Agreement will be subject to certain adjustments.
−Removed: The assets and liabilities of the GPCC at closing on September 1, 2019 were as follows (in thousands):
+Added: Revenue from Customer A represented 13 % and 19 % of total revenues for the three months ended March 31, 2021 and 2020, respectively.
+Added: ACQUISITIONS AND DISPOSITIONS
+Added: Acquisition of a Majority Interest in Fluid Quip Technologies, LLC
+Added: On December 9, 2020, the company acquired a majority interest in Fluid Quip Technologies, LLC.
+Added: During the three months ended March 31, 2021, there were no material changes to the preliminary purchase price allocation or assets acquired and liabilities assumed.
+Added: Disposition of Ord Ethanol Plant
+Added: On March 22, 2021, the company completed the sale of the plant located in Ord, Nebraska and certain related assets, to GreenAmerica Biofuels Ord LLC (the “Ord Transaction”) for a sale price of $ 64.0 million, plus working capital of $ 9.8 million.
+Added: Correspondingly, the company entered into a separate asset purchase agreement with the Partnership to acquire the storage assets and assign the rail transportation assets to be disposed of in the Ord Transaction for $ 27.0 million, which was used to pay down a portion of the Partnership’s credit facility.
+Added: In addition, as of March 31, 2021, the company had a payable of $ 0.5 million for amounts owed to the Partnership as a result of a purchase price adjustment based on additional railcars being transferred to GreenAmerica Biofuels Ord LLC as part of the transaction.
+Added: The divested assets were reported within the company’s ethanol production, agribusiness and energy services and partnership segments.
+Added: The company recorded a pretax gain on the sale of the Ord plant of $ 36.9 million recorded within corporate activities.
+Added: The asset and liabilities of the Ord ethanol plant at closing on March 22, 2021 were as follows:
+Added: (in thousands):
Amounts of Identifiable Assets Disposed and Liabilities Relinquished
−Removed: Accounts receivable, net
−Removed: Derivative financial instruments
+Added: Prepaid expenses and other
Property and equipment
−Removed: Current liabilities
−Removed: Short-term notes payable and other borrowings
−Removed: Current maturities of long-term debt
−Removed: Long-term debt
−Removed: Other liabilities
+Added: Accrued and other liabilities
Total identifiable net assets disposed
−Removed: Subsequent to September 30, 2020, the company sold its remaining interest in GPCC.
−Removed: Refer to Note 17 – Subsequent Events for further discussion.
−Removed: DISCONTINUED OPERATIONS
−Removed: 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.
−Removed: Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 .
−Removed: As such, GPCC results prior to its disposition are classified as discontinued operations for all applicable periods.
−Removed: Financial results of GPCC were previously recorded within the food and ingredients segment.
−Removed: Summarized Results of Discontinued Operations
−Removed: The following table presents the results of our discontinued operations (in thousands).
−Removed: 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.
−Removed: Three Months Ended September 30, 2019 (1)
−Removed: Nine Months Ended September 30, 2019 (1)
−Removed: Product revenues
−Removed: Costs and expenses
−Removed: Cost of goods sold (excluding depreciation and amortization expenses reflected below)
−Removed: Selling, general and administrative expenses
−Removed: Depreciation and amortization expenses
−Removed: Total costs and expenses
−Removed: Operating income
−Removed: Other income (expense)
−Removed: Interest income
−Removed: Interest expense
−Removed: Total other expense
−Removed: Income before income taxes
−Removed: Income tax expense
−Removed: (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.
−Removed: 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.
+Added: The amounts reflected above represent working capital estimates, including an adjustment of $ 0.4 million subsequent to the initial sale, which are considered preliminary until contractual post-closing working capital adjustments are finalized.
+Added: The operating lease right-of-use assets and lease liabilities associated with the railcar operating leases, currently estimated at approximately $ 2.0 million, respectively, will be extinguished upon the assignment of the associated leases to GreenAmerica Biofuels Ord LLC, which had not yet occurred as of March 31, 2021.
+Added: Disposition of Hereford Ethanol Plant
+Added: On December 28, 2020, the company completed the sale of the plant located in Hereford, Texas, and certain related assets, to Hereford Ethanol Partners, L.P.
+Added: There were no material changes to the assets disposed and liabilities relinquished from the disposition of the Hereford plant during the three months ended March 31, 2021.
+Added: Disposition of Equity Interest in Green Plains Cattle Company LLC
+Added: On October 1, 2020, the company sold its remaining 50 % joint venture interest in GPCC to AGR Partners LLC, TGAM Agribusiness Fund LP and StepStone Atlantic Fund, LP.
FAIR VALUE DISCLOSURES
1 unchanged sentence
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities the company can access at the measurement date.
−Removed: Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or other means.
−Removed: Grain inventories held for sale in the agribusiness and energy services segment are valued at nearby futures values, plus or minus nearby basis.
+Added: Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or
+Added: Grain inventories held for sale in the agribusiness and energy services segment are valued at nearby futures values, plus or minus nearby basis values, which represent differences in local markets including transportation or commodity quality or grade differences.
Level 3 – unobservable inputs that are supported by little or no market activity and comprise a significant component of the fair value of the assets or liabilities.
5 unchanged sentences
The company’s assets and liabilities by level are as follows (in thousands):
−Removed: Fair Value Measurements at September 30, 2020
+Added: Fair Value Measurements at March 31, 2021
Quoted Prices in
25 unchanged sentences
Total liabilities measured at fair value
−Removed: (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.
+Added: (1) Accounts payable is generally stated at historical amounts with the exception of $ 20.3 million and $ 19.4 million at March 31, 2021 and December 31, 2020, 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.
−Removed: 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.
−Removed: The fair value of the company’s debt approximated book value, which was $ 564.4 million at December 31, 2019.
+Added: The company believes the fair value of its debt approximated book value at March 31, 2021.
+Added: The fair value of the company’s debt was approximately $ 535.9 million compared with a book value of $ 526.2 million at December 31, 2020.
The company estimated the fair value of its outstanding debt using Level 2 inputs .
−Removed: 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.
−Removed: 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.
+Added: The company believes the fair values of its
+Added: accounts receivable approximated book value, which was $ 62.5 million and $ 55.6 million at March 31, 2021 and December 31, 2020, respectively.
+Added: 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.
SEGMENT INFORMATION
1 unchanged sentence
(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.
+Added: The food and ingredients segment had no activity during the three months ended March 31, 2021 and 2020.
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.
6 unchanged sentences
The following tables set forth certain financial data for the company’s operating segments (in thousands):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Ethanol production:
6 unchanged sentences
Total segment revenues
−Removed: Food and ingredients:
Revenues from external customers
1 unchanged sentence
Total segment revenues
−Removed: Revenues from external customers
−Removed: Intersegment revenues
−Removed: Total segment revenues
Revenues including intersegment activity
2 unchanged sentences
Refer to Note 2 - Revenue , for further disaggregation of revenue by operating segment.
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Cost of goods sold:
1 unchanged sentence
Agribusiness and energy services
−Removed: Food and ingredients
Intersegment eliminations
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Operating income (loss):
1 unchanged sentence
Agribusiness and energy services
−Removed: Food and ingredients
Intersegment eliminations
Corporate activities (2)
−Removed: (1) For the nine months ended September 30, 2020, operating loss for ethanol production includes a goodwill impairment charge of $ 24.1 million .
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: (1) Operating loss for ethanol production includes a goodwill impairment charge of $ 24.1 million for the three months ended March 31, 2020.
+Added: (2) Corporate activities for the three months ended March 31, 2021 included a $ 36.9 million pretax gain on sale of assets.
+Added: Three Months Ended March 31,
Depreciation and amortization:
3 unchanged sentences
The following table sets forth total assets by operating segment (in thousands):
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
7 unchanged sentences
Commodities held for sale are reported at market value.
−Removed: There was no lower of cost or net realizable value inventory adjustment as of September 30, 2020.
−Removed: 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.
+Added: There was no lower of cost or net realizable value inventory adjustment as of March 31, 2021 or December 31, 2020.
The components of inventories are as follows (in thousands):
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
4 unchanged sentences
Supplies and parts
−Removed: The company had two reporting units, to which goodwill was assigned.
−Removed: We are required to perform impairment tests related to our goodwill annually, which we perform as of October 1, or sooner if an indicator of impairment occurs.
−Removed: Near term industry outlook due to the significant decrease in crude oil prices, lower gasoline demand, general uncertainty due to the COVID-19 outbreak and the subsequent decline in our stock price caused a decline in the company’s market capitalization during the three months ended March 31, 2020.
−Removed: As such, the company determined a triggering event had occurred that required an interim impairment assessment for its ethanol production reporting unit.
−Removed: Due to the impairment indicators noted as a result of these triggering events, we evaluated our goodwill as of March 31, 2020.
−Removed: Significant assumptions inherent in the valuation methodologies for goodwill were employed and included, but were not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital.
−Removed: Based on our quantitative evaluation, we determined that the fair value of the ethanol production reporting unit did not exceed its carrying value.
−Removed: 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.
−Removed: During the first half of 2020, a decline in the partnership’s stock price resulted in a decrease in the partnership’s market capitalization.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Changes in the carrying amount of goodwill attributable to each business segment were as follows (in thousands):
−Removed: Balance, December 31, 2019 (1)
−Removed: Impairment charge
−Removed: Balance, September 30, 2020 (1)
−Removed: (1) The company records goodwill within “Other assets” on the consolidated balance sheets.
DERIVATIVE FINANCIAL INSTRUMENTS
−Removed: 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.
−Removed: 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.
−Removed: The amount realized in income from equity method investees, net of income taxes will differ as commodity prices change.
+Added: At March 31, 2021, the company’s consolidated balance sheet reflected unrealized losses of $ 8.4 million, net of tax, in accumulated other comprehensive income.
+Added: The company expects these losses will be reclassified to operating income over the next 12 months as a result of hedged transactions that are forecasted to occur.
+Added: The amount realized in operating income will differ as commodity prices change.
Fair Values of Derivative Instruments
2 unchanged sentences
Liability Derivatives'
−Removed: September 30,
−Removed: September 30,
Derivative financial instruments
(1) At December 31, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $ 3.3 million, which include $ 2.8 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments.
−Removed: (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.
+Added: (2) At March 31, 2021, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 34.8 million, which included $ 24.8 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.
+Added: (3) At December 31, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 9.3 million, none of which were designated as cash flow hedging instruments.
Refer to Note 4 - Fair Value Disclosures , which contains fair value information related to derivative financial instruments.
3 unchanged sentences
Location of Gain (Loss) Reclassified from Accumulated Other
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Comprehensive Income into Income
Cost of goods sold
−Removed: Net loss from discontinued operations, net of income taxes
Net gain recognized in loss before income taxes
1 unchanged sentence
Gain (Loss) Recognized in Other Comprehensive Income on
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Commodity contracts
Amount of Gain (Loss)
+Added: Location of Gain (Loss)
Recognized in Income on Derivatives
Derivatives Not Designated
−Removed: Location of Gain (Loss)
Recognized in Income
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
as Hedging Instruments
3 unchanged sentences
Costs of goods sold
−Removed: Commodity contracts
−Removed: Net loss from discontinued operations, net of income taxes
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):
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
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):
−Removed: Location and Amount of Gain (Loss) Recognized in
−Removed: Income on Cash Flow and Fair Value Hedging Relationships
−Removed: for the Three Months Ended September 30,
−Removed: Net Income from Discontinued Operations, Net of Income Taxes
−Removed: Net Income from Discontinued Operations, Net of Income Taxes
+Added: Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended March 31,
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
−Removed: Location and Amount of Gain (Loss) Recognized in
−Removed: Income on Cash Flow and Fair Value Hedging Relationships
−Removed: for the Nine Months Ended September 30,
−Removed: Net Income from Discontinued Operations, Net of Income Taxes
−Removed: Net Income from Discontinued Operations, Net of Income Taxes
−Removed: Gain (loss) on cash flow hedging relationships:
−Removed: Commodity contracts:
−Removed: Amount of gain (loss) reclassified from accumulated other comprehensive income into income
−Removed: Gain (loss) on fair value hedging relationships:
−Removed: Commodity contracts:
−Removed: Derivatives designated as hedging instruments
−Removed: 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
−Removed: 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.
−Removed: The open commodity derivative positions as of September 30, 2020, are as follows (in thousands):
+Added: There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the three months ended March 31, 2021 and 2020.
+Added: The open commodity derivative positions as of March 31, 2021 are as follows (in thousands):
Exchange Traded (1)
8 unchanged sentences
(3) Futures used for cash flow hedges.
−Removed: (4) Futures or non-exchange traded forwards used for fair value hedges.
+Added: (4) Futures 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.
−Removed: 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.
+Added: Included in revenues are net gains on energy trading contracts of $ 0.4 million and $ 3.1 million for the three months ended March 31, 2021 and 2020, respectively.
+Added: On January 1, 2021, the company early adopted the amended guidance in ASC 470-20 , using the modified retrospective method of transition.
+Added: The adoption of this guidance resulted in a $ 49.5 million decrease in additional paid-in capital, an $ 11.4 million increase in retained earnings and a $ 38.1 million increase in long-term debt, which included a $ 39.4 million increase in debt principal offset by a $ 1.3 million increase in debt issuance costs, resulting from amounts previously bifurcated to equity being reclassified to debt.
The components of long-term debt are as follows (in thousands):
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
−Removed: $ 170.0 million convertible notes due 2022 (1)
−Removed: $ 115.0 million convertible notes due 2024 (2)
−Removed: Green Plains Partners:
−Removed: $ 135.0 million credit facility (3)
+Added: 2.25 % convertible notes due 2027 (2)
+Added: 4.00 % convertible notes due 2024 (3)
+Added: 4.125 % convertible notes due 2022 (4)
+Added: Green Plains SPE LLC:
+Added: $ 125.0 million junior secured mezzanine notes due 2026 (5)
Green Plains Wood River and Green Plains Shenandoah:
$ 75.0 million delayed draw loan agreement (6)
+Added: Green Plains Partners:
+Added: $ 135.0 million credit facility (7)
Total book value of long-term debt
2 unchanged sentences
Total long-term debt
−Removed: (1) Includes $ 1.5 million and $ 2.0 million of unamortized debt issuance costs as of September 30, 2020 and December 31, 2019, respectively.
−Removed: (2) Includes $ 2.4 million and $ 2.8 million of unamortized debt issuance costs as of September 30, 2020 and December 31, 2019, respectively.
−Removed: (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.
−Removed: See below for further discussion.
−Removed: (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.
−Removed: The delayed draw loan includes $ 0.3 million of unamortized debt issuance costs as of September 30, 2020.
+Added: (1) See discussion on early adoption of the amended guidance in ASC 470-20 on the previous page.
+Added: (2) Includes $ 7.4 million of unamortized debt issuance costs as of March 31, 2021.
+Added: (3) Includes $ 2.8 million and $ 2.2 million of unamortized debt issuance costs as of March 31, 2021 and December 31, 2020, respectively.
+Added: (4) See discussion below regarding the repurchase of convertible notes due in 2022.
+Added: Includes $ 0.3 million and $ 1.3 million of unamortized debt issuance costs as of March 31, 2021 and December 31, 2020, respectively.
+Added: (5) Includes $ 1.0 million of unamortized debt issuance costs as of March 31, 2021 .
+Added: (6) Includes $ 0.3 million of unamortized debt issuance costs as of both March 31, 2021 and December 31, 2020 .
+Added: (7) Includes $ 1.7 million and $ 2.3 million of unamortized debt issuance costs as of March 31, 2021 and December 31, 2020, respectively.
The components of short-term notes payable and other borrowings are as follows (in thousands):
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
7 unchanged sentences
Corporate Activities
−Removed: During 2019, the company issued an aggregate $ 115.0 million of 4.00 % convertible senior notes due in 2024, or the 4.00 % notes.
+Added: In March 2021, the company issued an aggregate $ 230.0 million of 2.25 % convertible senior notes due in 2027, or the 2.25 % notes.
+Added: The 2.25 % notes bear interest at a rate of 2.25 % per year, payable on March 15 and September 15 of each year, beginning September 15, 2021, and mature on March 15, 2027 .
+Added: The 2.25 % notes are senior, unsecured obligations of the company.
+Added: The 2.25 % notes are 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 stock (and cash in lieu of fractional shares).
+Added: However, before September 15, 2026, the 2.25 % notes will not be convertible unless certain conditions are satisfied.
+Added: The initial conversion rate is 31.6206 shares of the company’s common stock per $ 1,000 principal amount of 2.25 % notes (equivalent to an initial conversion price of approximately $ 31.62 per share of the company’s common stock), representing an approximately 37.5 % premium over the offering price of the company’s common stock.
+Added: The conversion rate is subject to adjustment upon the occurrence of certain events, including but not limited to;
+Added: the event of a stock dividend or stock split;
+Added: the issuance of additional rights, options and warrants;
+Added: the event of a cash dividend or distribution;
+Added: or a tender or exchange offering.
+Added: 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 2.25 % notes for redemption.
+Added: On and after March 15, 2024, and prior to the maturity date, the company may redeem, for cash, all, but not less than all, of the 2.25 % notes if the last reported sale price of the company’s common stock equals or exceeds 140 % of the applicable conversion price on (i) at least 20 trading days during a 30 consecutive trading day period ending on the trading day
+Added: immediately prior to the date the company delivers notice of the redemption;
+Added: and (ii) the trading day immediately before the date of the redemption notice.
+Added: The redemption price will equal 100 % of the principal amount of the 2.25 % notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.
+Added: In addition, upon the occurrence of a “fundamental change” (as defined in the indenture for the 2.25 % notes), holders of the 2.25 % notes will have the right, at their option, to require the company to repurchase their 2.25 % notes for cash at a price equal to 100 % of the principal amount of the 2.25 % notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
+Added: During June 2019, the company issued an aggregate $ 115.0 million of 4.00 % convertible senior notes due in 2024, or the 4.00 % notes.
The 4.00 % notes are senior, unsecured obligations of the company, with interest payable on January 1 and July 1 of each year, beginning January 1, 2020, at a rate of 4.00 % per annum.
3 unchanged sentences
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.
−Removed: The conversion rate will be subject to adjustment upon the occurrence of certain events.
+Added: The conversion rate will be subject to adjustment upon the occurrence of certain events, including but not limited to;
+Added: the event of a stock dividend or stock split;
+Added: the issuance of additional rights, options and warrants;
+Added: the event of a cash dividend or distribution;
+Added: 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.
3 unchanged sentences
In August 2016, the company issued $ 170.0 million of 4.125 % convertible senior notes due in 2022, or the 4.125 % notes.
+Added: In March 2021, concurrent with the issuance of the 2.25 % notes, the company used approximately $ 156.5 million of the net proceeds of the 2.25 % notes to repurchase approximately $ 135.7 million aggregate principal amount of the 4.125 % notes, in privately negotiated transactions.
+Added: Pursuant to the guidance within ASC 470, Debt , the company recorded a loss upon extinguishment of $ 22.1 million, measured by the difference between the fair value and carrying value of the notes, which was recorded to interest expense.
+Added: This charge included $ 1.2 million of unamortized debt issuance costs related to the principal balance extinguished.
The 4.125 % notes are senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year.
2 unchanged sentences
The initial conversion rate is 35.7143 shares of common stock per $ 1,000 of principal, which is equal to a conversion price of approximately $ 28.00 per share.
−Removed: The conversion rate is subject to adjustment upon the occurrence of certain events, including upon redemption of the 4.125 % notes.
+Added: The conversion rate will be subject to adjustment upon the occurrence of certain events, including but not limited to;
+Added: the event of a stock dividend or stock split;
+Added: the issuance of additional rights, options and warrants;
+Added: the event of a cash dividend or distribution;
+Added: or a tender or exchange offering.
The company may redeem all, but not less than all, of the 4.125 % notes at any time on or after September 1, 2020, if 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.
5 unchanged sentences
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.
−Removed: Advances are subject to variable interest rates equal
−Removed: to daily LIBOR plus 2.25 % on the credit facility and daily LIBOR plus 3.25 % on the FILO credit facility.
+Added: 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.
16 unchanged sentences
Green Plains Grain has entered into short-term inventory financing agreements with a financial institution.
−Removed: 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.
+Added: At March 31, 2021, 5.5 million bushels of corn had been designated as collateral under these agreements at initial values totaling $ 32.3 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.
−Removed: At September 30, 2020, the short-term notes payable were valued at $ 5.9 million and were measured using Level 2 inputs.
+Added: At March 31, 2021, the short-term notes payable were valued at $ 32.3 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.
1 unchanged sentence
Ethanol Production Segment
+Added: On February 9, 2021, Green Plains SPE LLC, a wholly-owned special purpose subsidiary and parent of Green Plains Obion and Green Plains Mount Vernon issued $ 125.0 million of junior secured mezzanine notes due 2026 (the “Junior Notes”) with four funds and accounts managed by BlackRock for the purchase of all notes issued.
+Added: The Junior Notes will mature on February 9, 2026 and are secured by a pledge of the membership interests in and the real property owned by Green Plains Obion and Green Plains Mount Vernon.
+Added: The proceeds of the Junior Notes will be used to construct high protein processing systems at the Green Plains Obion and Green Plains Mount Vernon facilities.
+Added: The Junior Notes accrue interest at an annual rate of 11.75% .
+Added: However, subject to the satisfaction of certain conditions, the Green Plains SPE LLC may elect to pay an amount in cash equal to interest accruing at a rate of 6.00% per annum plus an amount equal to interest accruing at a rate of 6.75% per annum to be paid in kind.
+Added: The entire outstanding principal balance, plus any accrued and unpaid interest is due upon maturity.
+Added: Green Plains SPE LLC is required to comply with certain financial covenants
+Added: regarding minimum liquidity at Green Plains and a maximum aggregate loan to value.
+Added: The Junior Notes can be retired or refinanced after 42 months with no prepayment premium.
+Added: The Junior Notes have an unsecured parent guarantee from the company and have certain limitations on distributions, dividends or loans to the company unless there will not exist any event of default.
+Added: Funds associated with the Junior Notes are administered by a trustee and are included in the balance of restricted cash as of March 31, 2021.
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.
10 unchanged sentences
Green Plains Partners has a $ 135.0 million credit facility to fund working capital, capital expenditures and other general partnership purposes.
−Removed: The credit facility was amended on June 4, 2020, decreasing the amount available under the facility from $ 200.0 million to $ 135.0 million.
−Removed: The amended credit facility includes a $ 130.0 million term loan and a $ 5.0 million revolver, and matures on December 31, 2021 .
−Removed: The partnership made $ 12.5 million in principal payments on the term loan during the three and nine months ended September 30, 2020.
−Removed: 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.
+Added: The credit facility includes a $ 130.0 million term loan and a $ 5.0 million revolver, and matures on December 31, 2021 .
+Added: The partnership made $ 37.5 million in principal payments on the term loan during the three months ended March 31, 2021, including $ 7.5 million of scheduled repayments, $ 27.0 million related to the sale of the storage assets located adjacent to the Ord, Nebraska ethanol plant and a $ 3.0 million prepayment made with excess cash.
+Added: As of March 31, 2021, no additional prepayments on the term loan were required or paid.
+Added: Monthly principal payments of $ 2.5 million are required 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.
2 unchanged sentences
The term loan balance, and any advances on the revolver, are subject to a floating interest rate based on a 1.0% LIBOR floor plus 4.50 % to 5.25 % dependent upon the preceding fiscal quarter’s consolidated leverage ratio.
+Added: Prepayments of $ 40.0 million in excess of the scheduled monthly payments were made prior to April 1, 2021, and as such, the interest rate associated with the term loan balance will not be increased to a floating rate based on a 1.00 % LIBOR floor plus 5.00 % to 5.75 %.
The unused portion of the revolver is also subject to a commitment fee of 0.50 %.
2 unchanged sentences
Under the terms of the credit facility, swing line loans must be repaid within 10 days of the date of the advance.
−Removed: 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 %.
+Added: As of March 31, 2021, the term loan had a balance of $ 62.5 million and an interest rate of 5.75 % and the revolver had a balance outstanding of $ 0.3 million at an interest rate of 7.00 %.
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.
−Removed: The terms impose affirmative and negative covenants, including restrictions on the partnership’s ability to incur additional debt, acquire and sell assets, create liens, invest capital, pay distributions and materially amend the partnership’s commercial agreements with Green Plains Trade.
−Removed: The credit facility also requires the partnership to maintain a maximum consolidated leverage ratio, as of the end of any fiscal quarter, of no more than 3.0 x that decreases 0.25 x each quarter to 1.50 x by December 31, 2021, and a minimum consolidated debt service coverage ratio of 1.1 x , each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period.
+Added: The terms impose affirmative and negative covenants, including restrictions on the partnership’s ability to incur additional debt, acquire and sell assets, create liens, invest capital, pay distributions and materially amend the partnership’s commercial agreements with
+Added: Green Plains Trade.
+Added: The credit facility also requires the partnership to maintain a maximum consolidated leverage ratio and a minimum consolidated debt service coverage ratio , each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period.
+Added: The maximum consolidated leverage ratio required, as of the end of any fiscal quarter, is no more than 3.00 x and decreases 0.25 x each quarter to 1.50 x by December 31, 2021.
+Added: The minimum consolidated debt service coverage ratio for the three months ended March 31, 2021, was set to 1.05 x due to the partnership having completed prepayment of at least $ 40 million of the outstanding principal balance on the credit facility as specified in the loan agreement.
+Added: The minimum debt service coverage ratio will resume being set to 1.10 x for subsequent quarters.
The consolidated leverage ratio is calculated by dividing total funded indebtedness by the sum of the four preceding fiscal quarters’ consolidated EBITDA.
2 unchanged sentences
The credit facility is not guaranteed by the company.
+Added: The facility, which is supported by a group of financial institutions, will mature on December 31, 2021 unless extended by agreement of the lenders or replaced by another funding source.
+Added: While the partnership has not yet finalized renegotiations of the credit facility or secured additional funding necessary to repay the loan, the partnership believes it is probable that it will source appropriate funding given the partnership’s consistent and stable fee-based cash flows, ongoing profitability, low debt leverage and history of obtaining financing on reasonable commercial terms.
+Added: In the unlikely scenario that the partnership is unable to refinance its debt with the lenders prior to its maturity, the partnership will consider other financing sources, including but not limited to, the restructuring or issuance of new debt with a different lending group, the issuance of additional partnership units, other strategic actions to extinguish the debt, or support from the company.
Covenant Compliance
−Removed: The company was in compliance with its debt covenants as of September 30, 2020.
+Added: The company was in compliance with its debt covenants as of March 31, 2021.
Restricted Net Assets
−Removed: 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.
+Added: At March 31, 2021, there were approximately $ 152.7 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
−Removed: The company had a 2009 Equity Incentive Plan which reserved a total of 4.1 million shares of common stock for issuance pursuant to the plan.
−Removed: On May 6, 2020, the shareholders of the company approved the 2019 Equity Incentive Plan which granted an additional 1.6 million shares for stock-based compensation, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, restricted stock unit awards and performance share awards to eligible employees, non-employee directors and consultants.
−Removed: All shares remaining under the 2009 Equity Incentive Plan rolled into the 2019 Equity Incentive Plan effective May 6, 2020.
+Added: The company has an equity incentive plan which reserved a total of 5.7 million shares of common stock for issuance pursuant to the plan.
+Added: 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.
1 unchanged sentence
Restricted Stock Awards and Deferred Stock Units
−Removed: The non-vested stock award and deferred stock unit activity for the nine months ended September 30, 2020, is as follows:
+Added: The non-vested stock award and deferred stock unit activity for the three months ended March 31, 2021, is as follows:
Deferred Stock
4 unchanged sentences
Non-Vested at December 31, 2020
−Removed: Non-Vested at September 30, 2020
+Added: Non-Vested at March 31, 2021
Performance Shares
−Removed: On March 18, 2020, the board of directors granted performance shares to be awarded in the form of common stock to certain participants of the plan.
+Added: On February 18, 2021 and March 18, 2020, the board of directors granted performance shares to be awarded in the form of common stock to certain participants of the plan.
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).
−Removed: Performance shares granted in 2020 do not contain market based factors requiring a Monte Carlo valuation model.
+Added: Performance shares granted in 2021 and 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.
−Removed: If the company achieves the maximum performance goals, the maximum amount of shares available to be issued pursuant to the 2020 awards are 641,823 performance shares which represents approximately 276 % of the 232,566 performance shares which remain outstanding.
+Added: If the company achieves the maximum performance goals, the maximum amount of shares available to be issued pursuant to the 2021 and 2020 awards are 1,122,243 performance shares which represents approximately 272 % of the 412,121 performance shares which remain outstanding.
The actual number of performance shares that will ultimately vest is based on the actual performance targets achieved at the end of the performance period.
5 unchanged sentences
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.
−Removed: 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.
+Added: On March 19, 2021, based on criteria discussed above, the 2018 performance shares vested at a target of 75 %.
+Added: If the company’s RONA and TSR achieve the maximum goals, the maximum amount of shares available to be issued pursuant to the 2019 awards are 252,279 performance shares or 150 % of the 168,186 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.
1 unchanged sentence
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:
−Removed: Performance Awards
FY 2019 Performance Awards
4 unchanged sentences
Closing stock price on the date of grant
−Removed: The non-vested performance share award activity for the nine months ended September 30, 2020, is as follows:
+Added: The non-vested performance share award activity for the three months ended March 31, 2021, is as follows:
Average Grant-
3 unchanged sentences
Non-Vested at December 31, 2020
−Removed: Non-Vested at September 30, 2020
−Removed: Stock Options
−Removed: The fair value of the stock options is estimated on the date of the grant using the Black - Scholes option - pricing model, a pricing model acceptable under GAAP.
−Removed: The expected life of the options is the period of time the options are expected to be outstanding.
−Removed: The company did no t grant any stock option awards during the nine months ended September 30, 2020 and 2019.
−Removed: The activity related to the exercisable stock options for the nine months ended September 30, 2020, is as follows:
−Removed: Weighted-Average
−Removed: Exercise Price
−Removed: Weighted-Average
−Removed: Contractual Term
−Removed: Aggregate Intrinsic Value
−Removed: (in thousands)
−Removed: Outstanding at December 31, 2019
−Removed: Outstanding at September 30, 2020
−Removed: Exercisable at September 30, 2020
+Added: Non-Vested at March 31, 2021
Green Plains Partners
Green Plains Partners has a long-term incentive plan (LTIP) intended to promote the interests of the partnership, its general partner and affiliates by providing unit-based incentive compensation awards to employees, consultants and directors to encourage superior performance.
−Removed: The LTIP reserves 2,500,000 common limited partner units for issuance in the form of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation rights, unit awards, profit interest units or other unit-based awards.
+Added: The LTIP reserves 2,500,000 common limited partner units for issuance in the form of
+Added: options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation rights, unit awards, profit interest units or other unit-based awards.
The partnership measures unit-based compensation at fair value on the grant date, with no adjustments for estimated forfeitures.
The partnership records noncash compensation expense related to the awards over the requisite service period on a straight-line basis.
−Removed: The non-vested unit-based awards activity for the nine months ended September 30, 2020, is as follows:
−Removed: Deferred Stock
−Removed: Average Grant-
−Removed: Date Fair Value
−Removed: Weighted-Average
−Removed: Vesting Term
−Removed: Non-Vested at December 31, 2019
−Removed: Non-Vested at September 30, 2020
+Added: There was no change in the number of non-vested based awards during the three months ended March 31, 2021.
Stock-Based and Unit Based Compensation Expense
−Removed: 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.
−Removed: 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.
+Added: Compensation costs for stock-based and unit-based payment plans were $ 0.9 million and $ 1.3 million for the three months ended March 31, 2021 and 2020, respectively.
+Added: At March 31, 2021, there was $ 16.5 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 2.5 years.
3 unchanged sentences
The company computed diluted EPS by dividing net income on an if-converted basis, adjusted to add back net interest expense related to the convertible debt instruments, by the weighted average number of common shares outstanding during the period, adjusted to include the shares that would be issued if the convertible debt instruments were converted to common shares and the effect of any outstanding dilutive securities.
−Removed: In addition, due to the presentation of GPCC as discontinued operations, the company has presented basic and diluted earnings per share from both continuing operations and from discontinued operations.
The basic and diluted EPS are calculated as follows (in thousands, except per share amounts):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Net loss from continuing operations (1)
−Removed: Net income from discontinued operations
+Added: Three Months Ended March 31,
+Added: EPS - basic and diluted:
Net loss attributable to Green Plains
−Removed: Weighted-average shares outstanding - basic
−Removed: Dilutive effect of convertible debt and stock-based compensation (2)
−Removed: Weighted-average shares outstanding - diluted
+Added: Weighted average shares outstanding - basic and diluted
EPS - basic and diluted
−Removed: EPS from continuing operations
−Removed: EPS from discontinued operations
Anti-dilutive weighted-average convertible debt and stock-based compensation (1)
−Removed: (1) Net loss from continuing operations can be recalculated from our consolidated statements of operations by taking the net loss from continuing operations including noncontrolling interest less net income attributable to noncontrolling interests.
−Removed: (2) The effect related to the company’s convertible debt and stock-based compensation awards have been excluded from diluted EPS for the periods presented as the inclusion of these shares would have been antidilutive.
+Added: (1) The effect related to the company’s convertible debt, outstanding warrants and stock-based compensation awards have been excluded from diluted EPS for the periods presented as the inclusion of these shares would have been anti-dilutive.
STOCKHOLDERS’ EQUITY
−Removed: Components of stockholders’ equity for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):
+Added: Early Adoption of ASC 470-20
+Added: On January 1, 2021, the company early adopted the amended guidance in ASC 470-20 , using the modified retrospective method of transition.
+Added: The adoption of this guidance resulted in a $ 49.5 million decrease in additional paid-in capital, an $ 11.4 million increase in retained earnings and a $ 38.1 million increase in long-term debt, which included a $ 39.4 million increase in debt principal offset by a $ 1.3 million increase in debt issuance costs, resulting from amounts previously bifurcated to equity being reclassified to debt.
+Added: Upon adoption of amended guidance in ASC 470-20 , the company reversed the remaining deferred tax liability of $ 9.2 million associated to the equity portion of previously issued convertible debt.
+Added: As the company had recorded a full valuation allowance against its deferred tax assets, the reversal of the $ 9.2 million deferred tax liability would require an increase to the existing valuation allowance by the same amount which would normally be recorded through current income tax expense.
+Added: However, because the change in the deferred tax liability is directly linked to the adoption of ASC 470-20 , which is accounted for as a cumulative effect adjustment, the required increase to the valuation allowance is recorded as part of the cumulative adjustment to stockholders’ equity and has no effect on the income statement.
+Added: Public Offering of Common Stock
+Added: On March 1, 2021, the company completed an offering of 8,751,500 shares of our common stock, par value $ 0.001 per share, in a public offering at a price of $ 23.00 per share (the “Common Stock Offering”).
+Added: The Common Stock Offering resulted in net proceeds of $ 191.1 million, after deducting underwriting discounts and commissions as well as the company’s offering expenses.
+Added: During the three months ended March 31, 2021, in connection with certain arrangements, the company issued warrants to purchase shares of its common stock.
+Added: The company measures the fair value of the warrants using the Black-Scholes option pricing model as of the issuance date.
+Added: Exercisable warrants are equity based and recorded as a reduction in additional paid-in capital.
+Added: The company has reserved 2,550,000 shares of common stock for the exercise of warrants to non-employees, of which 2,275,000 are exercisable.
+Added: These warrants could potentially dilute basic earnings per share in future years.
+Added: 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.
+Added: Components of stockholders’ equity for the three months ended March 31, 2021 and 2020 are as follows (in thousands):
Treasury Stock
1 unchanged sentence
Stockholders'
+Added: Balance, December 31, 2020
+Added: Impact of ASC 470-20 adoption (1)
Balance, January 1, 2021
Net income (loss)
−Removed: Distributions declared
+Added: Cash distributions declared
Other comprehensive loss
4 unchanged sentences
Other comprehensive income,
−Removed: Share of equity method investees other comprehensive loss arising during the period, net of tax
−Removed: Repurchase of common stock
+Added: Investment in subsidiary
+Added: Issuance of warrants
+Added: Issuance of common stock for cash at $ 23.00 per share, net of fees
Stock-based compensation
Balance, March 31, 2021
−Removed: Net income (loss)
−Removed: Distributions declared
−Removed: Other comprehensive loss
−Removed: before reclassification
−Removed: Amounts reclassified from
−Removed: accumulated other
−Removed: comprehensive loss
−Removed: Other comprehensive income,
−Removed: Share of equity method investees other comprehensive loss arising during the period, net of tax
−Removed: Stock-based compensation
−Removed: Balance, June 30, 2020
−Removed: Net income (loss)
−Removed: Distributions declared
−Removed: Other comprehensive loss
−Removed: before reclassification
−Removed: Amounts reclassified from
−Removed: accumulated other
−Removed: comprehensive loss
−Removed: Other comprehensive income,
−Removed: Share of equity method investees other comprehensive loss arising during the period, net of tax
−Removed: Stock-based compensation
−Removed: Balance, September 30, 2020
+Added: (1) See Note 1 – Recent Accounting Pronouncements and Note 8 – Debt for discussion on adoption of ASC 470-20 .
Treasury Stock
3 unchanged sentences
Net income (loss)
−Removed: Cash dividends and
Distributions declared
5 unchanged sentences
Other comprehensive income,
−Removed: Proceeds from disgorgement of shareholders short-swing profits, net (1)
−Removed: Stock-based compensation
−Removed: Balance, March 31, 2019
−Removed: Net income (loss)
−Removed: Cash dividends and
−Removed: distributions declared
−Removed: Other comprehensive loss
−Removed: before reclassification
−Removed: Amounts reclassified from
−Removed: accumulated other
−Removed: comprehensive loss
−Removed: Other comprehensive income,
−Removed: Issuance of 4.00 % convertible notes due 2024, net of tax
−Removed: Settlement of 3.25 % convertible
−Removed: notes due 2019, net of tax
−Removed: Repurchase of common stock
−Removed: Stock-based compensation
−Removed: Balance, June 30, 2019
−Removed: Net income (loss)
−Removed: Cash dividends and
−Removed: distributions declared
−Removed: Other comprehensive loss
−Removed: before reclassification
−Removed: Amounts reclassified from
−Removed: accumulated other
−Removed: comprehensive loss
−Removed: Other comprehensive income,
Share of equity method investees other comprehensive loss arising during the period, net of tax
−Removed: Issuance of 4.00 % convertible notes due 2024, net of tax
Repurchase of common stock
Stock-based compensation
−Removed: Balance, September 30, 2019
−Removed: (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.
−Removed: The amount was recorded as an increase to additional paid-in capital, net of tax.
+Added: Balance, March 31, 2020
Amounts reclassified from accumulated other comprehensive income are as follows (in thousands):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Statements of
3 unchanged sentences
Commodity derivatives
−Removed: Total gains on cash flow hedges from continuing operations
−Removed: Income on cash flow hedges from discontinued operations, net of income taxes
+Added: Total gains on cash flow hedges
Income tax expense
1 unchanged sentence
(2) Costs of goods sold
−Removed: (3) Loss from continuing operations before income taxes and income from equity method investees
−Removed: (4) Net income from discontinued operations, net of income taxes
+Added: (3) Loss before income taxes and income from equity method investees
(4) Income tax benefit (expense)
6 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: In the third quarter no additional tax benefit was recorded related to the CARES Act.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The amount of unrecognized tax benefits for uncertain tax positions was $ 51.6 million as of September 30, 2020 and December 31, 2019.
+Added: In the first quarter of 2020, 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.
+Added: No additional tax benefit was recorded related to the CARES Act during the three months ended March 31, 2021.
+Added: The company recorded income tax expense of $ 1.9 million for the three months ended March 31, 2021, compared with income tax benefit of $ 44.3 million for the same period in 2020.
+Added: The increase in income tax expense recorded for the three months ended March 31, 2021 was primarily due to the recording of a valuation allowance against increases in deferred tax assets for the three months ended March 31, 2021 compared to the tax benefit recorded for the same period in 2020 to reflect the benefit associated with the carry back of the tax NOL generated in 2019 to the 2014 tax year under the CARES Act of 2020, as well as the release of a previously recorded valuation allowance against the 2019 NOL and other deferred tax assets.
+Added: The amount of unrecognized tax benefits for uncertain tax positions was $ 51.4 million as of March 31, 2021 and $ 51.6 million as of December 31, 2020.
The 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.
+Added: Upon adoption of amended guidance in ASC 470-20 , the company reversed the remaining deferred tax liability of $ 9.2 million associated to the equity portion of previously issued convertible debt.
+Added: As the company had recorded a full valuation allowance against its deferred tax assets, the reversal of the $ 9.2 million deferred tax liability would require an increase to the existing valuation allowance by the same amount which would normally be recorded through current income tax expense.
+Added: However, as the change in the deferred tax liability is directly linked to the adoption of ASC 470-20 , which is accounted for as a cumulative effect adjustment, the required increase to the valuation allowance is recorded as part of the cumulative adjustment to stockholders’ equity and has no effect on the statement of operations.
COMMITMENTS AND CONTINGENCIES
4 unchanged sentences
Equipment renewals are not considered reasonably certain to be exercised as they typically renew with significantly different underlying terms.
+Added: The company may sublease certain of its railcars to third parties on a short-term basis.
+Added: The subleases are classified as operating leases, with the associated sublease income being recognized on a straight-line basis over the lease term.
The components of lease expense are as follows (in thousands):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Lease expense
4 unchanged sentences
Supplemental cash flow information related to operating leases is as follows (in thousands):
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
+Added: Three Months Ended March 31,
Cash paid for amounts included in the measurement of lease liabilities:
5 unchanged sentences
Supplemental balance sheet information related to operating leases is as follows:
−Removed: September 30, 2020
+Added: March 31, 2021
December 31, 2020
5 unchanged sentences
Lease liabilities
−Removed: 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 .
−Removed: 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 .
+Added: The company has additional railcar operating leases that will commence in the second quarter of 2021 to replace expiring leases, with estimated future minimum lease commitments of approximately $ 1.7 million and lease terms of three to five years .
The undiscounted amounts are not included in the tables above.
5 unchanged sentences
Refer to Note 2 – Revenue for further discussion on lease revenue.
−Removed: 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.
+Added: As of March 31, 2021, the company had contracted future purchases of grain, corn oil, natural gas, ethanol and distillers grains, valued at approximately $ 400.7 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.
RELATED PARTY TRANSACTIONS
+Added: Aircraft Leases
+Added: The company entered into two agreements with an entity controlled by Wayne Hoovestol for the lease of two aircraft.
+Added: Hoovestol is chairman of the company’s board of directors.
+Added: Given the limited amount of travel during fiscal year 2020, the companies have agreed to defer the monthly payment until excess carryover hours are used.
+Added: As of March 31, 2021, the company has approximately 54 hours of flight time available to be used.
+Added: Once used, the company agreed to pay $ 11,588 per month for the combined use of up to 125 hours per year for the aircraft.
+Added: Flight time in excess of 125 hours per year will incur additional hourly charges.
+Added: Payments related to these leases totaled $ 21 thousand and $ 6 thousand during the three months ended March 31, 2021 and 2020, respectively.
+Added: The company had $ 3 thousand in outstanding payables related to these agreements as of March 31, 2021 and $ 0 in outstanding payables related to these agreements as of December 31, 2020.
Green Plains Cattle Company LLC
−Removed: The company engages in certain related party transactions with GPCC.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: As of September 30, 2020, the company also had an additional $ 2.0 million outstanding receivable related to the GPCC bonus provision.
+Added: The company engaged in certain related party transactions with GPCC, which was considered a related party until the fourth quarter of 2020 at which time the company’s remaining 50 % interest was sold.
+Added: The company provided a variety of shared services to GPCC, including accounting and finance, payroll and human resources, information technology, legal, communications and treasury activities.
+Added: The company reduced selling, general and administrative expenses by $ 0.4 million and related to shared services provided for the three months ended March 31, 2020.
Green Plains Trade Group, a subsidiary of the company, enters into certain sale contracts with GPCC during the normal course of business.
−Removed: 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.
+Added: Revenues were $ 2.9 million for the three months ended March 31, 2020.
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.
1 unchanged sentence
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 and receives usual and customary advisory fees.
−Removed: Aircraft Leases
−Removed: Effective January 1, 2015, the company entered into two agreements with an entity controlled by Wayne Hoovestol for the lease of two aircrafts.
−Removed: Hoovestol is chairman of the company’s board of directors.
−Removed: The company agreed to pay $ 9,766 per month for the combined use of up to 125 hours per year of the aircrafts.
−Removed: Flight time in excess of 125 hours per year will incur additional hourly charges.
−Removed: 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.
−Removed: Once those hours are utilized, the companies will re-evaluate its arrangements.
−Removed: 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.
−Removed: 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.
−Removed: EQUITY METHOD INVESTMENTS
−Removed: Green Plains Cattle Company LLC
−Removed: On September 1, 2019, Green Plains, TGAM and StepStone entered into the Second Amended and Restated Limited Liability Company Agreement of GPCC.
−Removed: GPCC was previously a wholly owned subsidiary of Green Plains.
−Removed: 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.
−Removed: 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.
−Removed: GPCC results prior to its disposition are classified as discontinued operations in our current and prior period financials.
−Removed: The GPCC investment is accounted for using the equity method of accounting.
−Removed: GPCC conducts the business of the joint venture, including (i) owning and operating the cattle feeding operations (as defined below), and (ii) any other activities approved by GPCC’s board of managers.
−Removed: GPCC continues to have the capacity to support 355,000 head of cattle and has approximately 11.7 million bushels of grain storage capacity.
−Removed: Historical GPCC operational results prior to its disposition are recorded as discontinued operations in the consolidated statement of operations.
−Removed: The company does not consolidate any part of the assets or liabilities or operating results of its equity method investee.
−Removed: The company’s share of net income or loss in the investee increases or decreases, as applicable, the carrying value of the investment.
−Removed: With respect to GPCC, the company determined that this entity does not represent a variable interest entity and consolidation is not required.
−Removed: 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.
−Removed: Subsequent to September 30, 2020, the company sold its remaining interest in GPCC.
−Removed: Refer to Note 17 – Subsequent Events for further discussion.
−Removed: Summarized Financial Information
−Removed: Our equity method investments are summarized in the following tables (in thousands):
−Removed: Ownership as of September 30, 2020
−Removed: September 30, 2020
−Removed: December 31, 2019
−Removed: Green Plains Cattle Company LLC (1)
−Removed: (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.
−Removed: 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.
−Removed: Earnings from equity method investments were as follows:
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Green Plains Cattle Company LLC (1)
−Removed: Total income from equity method investments, net of income taxes
−Removed: Distributions from equity method investments
−Removed: Income (loss) from equity method investments, net of distributions
−Removed: (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.
−Removed: 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.
−Removed: The company reports its proportional share of equity method investment income (loss) in the consolidated statements of operations.
−Removed: 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.
−Removed: The following table present summarized information of GPCC.
−Removed: Three Months Ended
−Removed: September 30,
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: Total revenues
−Removed: Total operating expenses
−Removed: (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.
−Removed: September 30, 2020
−Removed: December 31, 2019
−Removed: Balance sheet:
−Removed: Current assets
−Removed: Noncurrent assets
−Removed: Current liabilities
−Removed: Noncurrent liabilities
−Removed: SUBSEQUENT EVENTS
−Removed: Disposition of Equity Interest in Green Plains Cattle Company LLC
−Removed: 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.
−Removed: 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.
−Removed: Transaction fees related to the disposal were not material.
−Removed: There was no material gain or loss recorded as part of this transaction.
−Removed: The Securities Purchase Agreement contains certain earn-out provisions to be paid to or received from the Buyers if certain EBITDA thresholds are met.
−Removed: 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.