What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-02 · 221 added, 169 removed, 850 unchanged (31% of the section changed)

4 unchanged sentences

(in thousands, except share amounts)

September 30,

2022 December 31,

36 unchanged sentences

Accumulated other comprehensive loss ( 10,831 ) ( 12,310 )

Treasury stock, 8,244,456 shares

Treasury stock, 2,805,059 and 8,244,456 shares, respectively

( 31,174 ) ( 91,626 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

Total other income (expense) ( 7,995 ) ( 9,903 ) 4,852 ( 61,409 )

Income (loss) before income taxes and income (loss) from equity method investees 55,012 11,166 ( 1,214 ) 10,874

Loss before income taxes and income (loss) from equity method investees ( 69,875 ) ( 54,578 ) ( 71,089 ) ( 43,704 )

Income tax benefit (expense) 1,888 ( 7 ) 146 2,914

Income (loss) from equity method investees 84 174 ( 112 ) 517

Net income (loss) 52,720 16,117 ( 3,152 ) 14,138

Net loss ( 67,903 ) ( 54,411 ) ( 71,055 ) ( 40,273 )

Net income attributable to noncontrolling interests 5,623 5,211 17,547 16,151

Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ ( 15,076 ) $ 3,198

Net loss attributable to Green Plains $ ( 73,526 ) $ ( 59,622 ) $ ( 88,602 ) $ ( 56,424 )

Earnings per share:

Net income (loss) attributable to Green Plains - basic $ 0.87 $ 0.21 $ ( 0.28 ) $ 0.08

Net income (loss) attributable to Green Plains - diluted $ 0.73 $ 0.20 $ ( 0.28 ) $ 0.07

Net loss attributable to Green Plains - basic and diluted $ ( 1.27 ) $ ( 1.18 ) $ ( 1.62 ) $ ( 1.27 )

Weighted average shares outstanding:

Basic 53,033 45,425 52,960 41,581

Diluted 66,895 58,171 52,960 42,675

Basic and diluted 57,677 50,482 54,550 44,581

See accompanying notes to the consolidated financial statements.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net income (loss) $ 52,720 $ 16,117 $ ( 3,152 ) $ 14,138

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of $ 3,579 , ($ 1,616 ), $ 1,658 and ($ 89 ), respectively

Net loss $ ( 67,903 ) $ ( 54,411 ) $ ( 71,055 ) $ ( 40,273 )

Other comprehensive income, net of tax:

Unrealized gains on derivatives arising during the period, net of tax expense of ($ 2,494 ), ($ 171 ), ($ 836 ) and ($ 260 ), respectively

7,740 538 2,591 820

Reclassification of realized losses on derivatives, net of tax benefit of ($ 878 ), ($ 1,246 ), ($ 177 ) and ($ 812 ), respectively

Reclassification of realized losses (gains) on derivatives, net of tax expense (benefit) of $ 536 , $ 62 , $ 359 and ($ 750 ), respectively

( 1,662 ) ( 194 ) ( 1,112 ) 2,390

Total other comprehensive income (loss), net of tax ( 8,020 ) 9,092 ( 4,599 ) 2,866

Comprehensive income (loss) 44,700 25,209 ( 7,751 ) 17,004

Total other comprehensive income, net of tax 6,078 344 1,479 3,210

Comprehensive loss ( 61,825 ) ( 54,067 ) ( 69,576 ) ( 37,063 )

Comprehensive income attributable to noncontrolling interests 5,623 5,211 17,547 16,151

Comprehensive income (loss) attributable to Green Plains $ 38,378 $ 18,835 $ ( 19,675 ) $ 6,064

Comprehensive loss attributable to Green Plains $ ( 67,448 ) $ ( 59,278 ) $ ( 87,123 ) $ ( 53,214 )

See accompanying notes to the consolidated financial statements.

3 unchanged sentences

(unaudited and in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net income (loss) $ ( 3,152 ) $ 14,138

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

Net loss $ ( 71,055 ) $ ( 40,273 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 66,013 69,493

Amortization of debt issuance costs and debt discount 2,450 4,879

Amortization of debt issuance costs 3,214 6,957

Gain on sale of assets, net — ( 31,245 )

Inventory lower of cost or net realizable value adjustment 11,177 —

Loss on extinguishment of debt 419 32,645

17 unchanged sentences

Other investing activities ( 6,976 ) ( 7,000 )

Net cash provided by (used in) investing activities ( 35,342 ) 9,947

Net cash used in investing activities ( 90,284 ) ( 43,470 )

Cash flows from financing activities:

19 unchanged sentences

Continued from the previous page

Six Months Ended

Nine Months Ended

September 30,

Reconciliation of total cash, cash equivalents and restricted cash:

3 unchanged sentences

Non-cash financing activities:

Exchange of 4.00 % convertible notes due 2024

Exchange of common stock held in treasury stock for 4.00 % convertible notes due 2024

Exchange of 4.00 % convertible notes due 2024 for shares of common stock held in treasury stock

$ 64,000 $ 51,000

Exchange of 4.125 % convertible notes due 2022 for shares of common stock held in treasury stock

Supplemental investing activities:

17 unchanged sentences

Unconsolidated entities are included in the financial statements on an equity basis.

As of June 30, 2022, the company owns a 48.9 % limited partner interest and a 2.0 % general partner interest in Green Plains Partners LP.

As of September 30, 2022, the company owns a 48.8 % limited partner interest and a 2.0 % general partner interest in Green Plains Partners LP.

Public investors own the remaining 49.2 % limited partner interest in the partnership.

4 unchanged sentences

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

The partnership’s consolidated total assets as of June 30, 2022 and December 31, 2021, excluding intercompany balances, are $ 100.1 million and $ 100.3 million, respectively, and primarily consist of property and equipment, operating lease right-of-use assets and goodwill.

The partnership’s consolidated total liabilities as of June 30, 2022 and December 31, 2021, excluding intercompany balances, are $ 113.4 million and $ 111.4 million, respectively, which primarily consist of long-term debt as discussed in Note 8 – Debt and operating lease liabilities.

The partnership’s consolidated total assets as of September 30, 2022 and December 31, 2021, excluding intercompany balances, are $ 95.4 million and $ 100.3 million, respectively, and primarily consist of cash and cash equivalents, property and equipment, operating lease right-of-use assets and goodwill.

The partnership’s consolidated total liabilities as of September 30, 2022 and December 31, 2021, excluding intercompany balances, are $ 109.7 million and $ 111.4 million, respectively, which primarily consist of long-term debt as discussed in Note 8 – Debt and operating lease liabilities.

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

9 unchanged sentences

Actual results could differ from those estimates.

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 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.

Key accounting policies, including but not limited to those relating to 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.

Description of Business

21 unchanged sentences

At times, the company settles these transactions by transferring its obligations to other counterparties rather than delivering the physical commodity.

Energy trading transactions are reported net as a component of revenue.

Revenues include net gains or losses from derivatives related to products sold while cost of goods sold includes net gains or losses from derivatives related to commodities purchased.

15 unchanged sentences

Materials include the cost of corn feedstock, denaturant, and process chemicals.

Corn feedstock costs include gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and transfer costs, as well as reclassifications of gains and losses on cash flow hedges from accumulated other comprehensive income or loss.

Corn feedstock costs include gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and transfer costs, as well as reclassifications of realized gains and losses on cash flow hedges from accumulated other comprehensive income or loss.

Plant overhead consists primarily of plant utilities, repairs and maintenance and outbound freight charges.

Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold.

The company uses exchange-traded futures and options contracts and forward purchase and sale contracts to attempt to minimize the effect of price changes on ethanol, grain and natural gas.

The company uses exchange-traded futures and options contracts and forward purchase and sale contracts to attempt to minimize the effect of price changes on ethanol, corn oil, grain and natural gas.

Exchange-traded futures and options contracts are valued at quoted market prices and settled predominantly in cash.

21 unchanged sentences

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.

When it becomes probable a forecasted transaction will not occur, the cash flow hedge treatment is discontinued, which affects earnings.

When it becomes

probable a forecasted transaction will not occur, the cash flow hedge treatment is discontinued, which affects earnings.

These derivative financial instruments are recognized in current assets or current liabilities at fair value.

5 unchanged sentences

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

In March 2020, the FASB issued amended guidance in ASC 848, Reference Rate Reform, and a subsequent update in January 2021 and October 2022, which provides optional expedients and exceptions to U.S.

GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates.

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, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship.

The guidance is effective upon issuance and to be applied prospectively from any date beginning March 12, 2020, through December 31, 2024.

The company does not expect the amended guidance to have a material impact on its hedging relationships nor a material impact on the company's consolidated financial statements.

Revenue by Source

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Ethanol Production Agribusiness & Energy

18 unchanged sentences

Total Revenues $ 811,015 $ 149,762 $ 20,066 $ ( 25,866 ) $ 954,977

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Ethanol Production Agribusiness & Energy

18 unchanged sentences

Total Revenues $ 2,309,734 $ 456,033 $ 58,820 $ ( 75,781 ) $ 2,748,806

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Ethanol Production Agribusiness & Energy

19 unchanged sentences

Total Revenues $ 588,349 $ 162,774 $ 19,251 $ ( 23,583 ) $ 746,791

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Ethanol Production Agribusiness & Energy

22 unchanged sentences

Major Customers

Revenues from Customer A represented 14 % and 12 % of total revenues for the three and six months ended June 30, 2022, respectively, and revenues from Customer B represented 12 % and 10 % of total revenues for the three and six months ended June 30, 2022, respectively, recorded within the ethanol production segment.

No single customer’s revenue was over 10% of total revenues for the three and six months ended June 30, 2021.

Revenues from Customer A represented 14 % and 13 % of total revenues for the three and nine months ended September 30, 2022, respectively, recorded within the ethanol production segment.

No single customer’s revenue was over 10% of total revenues for the three and nine months ended September 30, 2021.

Disposition of Ord Ethanol Plant

2 unchanged sentences

The divested assets were reported within the company’s ethanol production, agribusiness and energy services and partnership segments.

The company recorded a pretax gain on the sale of the Ord plant of $ 35.9 million within corporate activities during the six months ended June 30, 2021.

The company recorded a pretax gain on the sale of the Ord plant of $ 35.9 million within corporate activities during the nine months ended September 30, 2021.

FAIR VALUE DISCLOSURES

10 unchanged sentences

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

Fair Value Measurements at June 30, 2022

Fair Value Measurements at September 30, 2022

Quoted Prices in

39 unchanged sentences

Total liabilities measured at fair value $ — $ 49,782 $ 49,782

(1) Accounts payable is generally stated at historical amounts with the exception of $ 8.4 million and $ 12.6 million at June 30, 2022 and December 31, 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices.

(1) Accounts payable is generally stated at historical amounts with the exception of $ 14.2 million and $ 12.6 million at September 30, 2022 and December 31, 2021, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices.

These payables are hybrid financial instruments for which the company has elected the fair value option.

(2) As of June 30, 2022 and December 31, 2021, respectively, accrued and other liabilities includes $ 3.0 million and $ 3.3 million and other liabilities includes $ 6.5 million and $ 7.6 million of consideration related to potential earn-out payments recorded at fair value.

As of June 30, 2022, the fair value of the company’s debt was approximately $ 984.4 million compared with a book value of $ 902.6 million.

(2) As of September 30, 2022 and December 31, 2021, respectively, accrued and other liabilities includes $ 3.4 million and $ 3.3 million and other liabilities includes $ 6.8 million and $ 7.6 million of consideration related to potential earn-out payments recorded at fair value.

As of September 30, 2022, the fair value of the company’s debt was approximately $ 711.0 million compared with a book value of $ 703.2 million.

At December 31, 2021, the fair value of the company’s debt was approximately $ 891.1 million compared with a book value of $ 722.7 million.

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

The company believes the fair values of its marketable securities approximated book value, which was $ 25.0 million and $ 124.9 million at June 30, 2022 and December 31, 2021, respectively.

The company believes the fair values of its accounts receivable approximated book value, which was $ 158.4 million and $ 120.0 million at June 30, 2022 and December 31, 2021, respectively.

The company believes the fair values of its marketable securities approximated book value, which was $ 25.0 million and $ 124.9 million at September 30, 2022 and December 31, 2021, respectively.

The company believes the fair values of its accounts receivable approximated book value, which was $ 118.4 million and $ 120.0 million at September 30, 2022 and December 31, 2021, respectively.

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.

1 unchanged sentence

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

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

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

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

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

1 unchanged sentence

Ethanol production (1)

$ ( 64,121 ) $ ( 44,192 ) $ ( 87,773 ) $ ( 30,969 )

Agribusiness and energy services 5,205 3,225 25,894 15,720

4 unchanged sentences

$ ( 61,880 ) $ ( 44,675 ) $ ( 75,941 ) $ 17,705

(1) Corporate activities for the three and six months ended June 30, 2021 include a $ 3.8 million loss on sale of assets and a $ 33.1 million gain on sale of assets, respectively.

(1) Operating loss for ethanol production includes an inventory lower of cost or net realizable value adjustment of $ 11.2 million for the three and nine months ended September 30, 2022.

(2) Corporate activities for the three and nine months ended September 30, 2021 include a $ 1.8 million loss on sale of assets and a $ 31.2 million gain on sale of assets, respectively.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30,

2022 December 31,

Total assets (1) :

7 unchanged sentences

Inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories.

There was no lower of cost or market inventory adjustment as of June 30, 2022 and December 31, 2021.

As of September 30, 2022, the company recorded a $ 11.2 million lower of cost or net realizable value inventory adjustment associated with finished goods in cost of goods sold within the ethanol production segment.

There was no lower of cost or net realizable value inventory adjustment as of December 31, 2021.

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

June 30, 2022 December 31, 2021

September 30,

2022 December 31,

Finished goods $ 95,547 $ 91,448

5 unchanged sentences

DERIVATIVE FINANCIAL INSTRUMENTS

At June 30, 2022, the company’s consolidated balance sheet reflected unrealized losses of $ 16.9 million, net of tax, in accumulated other comprehensive loss.

At September 30, 2022, the company’s consolidated balance sheet reflected unrealized losses of $ 10.8 million, net of tax, in accumulated other comprehensive loss.

The company expects these items will be reclassified as operating income (loss) over the next 12 months as a result of hedged transactions that are forecasted to occur.

4 unchanged sentences

Fair Value Liability Derivatives'

September 30,

2022 December 31,

2021 June 30,

2021 September 30,

2022 December 31,

4 unchanged sentences

Total $ 24,164 $ 26,746 $ 24,375 $ 26,313

(1) At June 30, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $ 19.9 million, which included $ 11.6 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, $ 14.8 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(1) At September 30, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $ 7.2 million, which included $ 1.2 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, $ 7.1 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(2) At September 30, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 1.5 million, representing economic hedges.

(3) At December 31, 2021, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $ 17.1 million, which include $ 1.3 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, $ 0.5 million of unrealized losses on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

5 unchanged sentences

Comprehensive Income into Income Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

1 unchanged sentence

Cost of goods sold ( 4,760 ) 947 ( 3,748 ) 36,431

Net loss recognized in income (loss) before income taxes $ ( 3,393 ) $ ( 5,207 ) $ ( 727 ) $ ( 3,396 )

Net gain (loss) recognized in loss before income taxes $ 2,198 $ 256 $ 1,471 $ ( 3,140 )

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

1 unchanged sentence

Derivatives Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Derivatives, including exchange traded contracts and forward commodity purchase or sale contracts, and inventories of certain agricultural products, which include amounts acquired under deferred pricing contracts, are stated at fair value.

Inventories are not considered a derivative, rather they are carried at the lower of cost or market.

Inventories are not considered a derivative, rather they are carried at the lower of cost or net realizable value.

As such, changes in the fair value of inventories are not included in the table below.

4 unchanged sentences

on Derivatives Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Forwards Costs of goods sold 16,231 ( 14,212 ) ( 2,066 ) ( 9,699 )

Net gain (loss) recognized in income (loss) before income taxes $ ( 509 ) $ ( 8,110 ) $ ( 54,269 ) $ ( 40,341 )

Net loss recognized in loss before income taxes $ ( 697 ) $ ( 5,956 ) $ ( 54,966 ) $ ( 46,297 )

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets

1 unchanged sentence

Effect of Cash Flow and Fair Value Hedge Accounting on the Statements of Operations

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended June 30,

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended September 30,

Revenue Cost of

8 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 $ 6,958 $ ( 7,366 ) $ ( 691 ) $ 580

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Six Months Ended June 30,

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Nine Months Ended September 30,

Revenue Cost of

8 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 $ 5,219 $ ( 1,229 ) $ ( 39,571 ) $ 40,085

There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the three and six months ended June 30, 2022 and 2021.

The notional volume of open commodity derivative positions as of June 30, 2022, are as follows (in thousands):

There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the three and nine months ended September 30, 2022 and 2021.

The notional volume of open commodity derivative positions as of September 30, 2022, are as follows (in thousands):

Exchange Traded (1)

14 unchanged sentences

MmBTU Natural Gas

Options 6,204 Pounds Soybean Oil

Options ( 56 ) MmBTU Natural Gas

Forwards 27,808 ( 18 ) Bushels Corn

8 unchanged sentences

(4) Notional volume of exchange traded 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.

Included in revenues are net gains of $ 0.4 million and $ 1.2 million for the three and six months ended June 30, 2022, respectively, and net gains of $ 24 thousand and $ 0.5 million for the three and six months ended June 30, 2021, respectively, on energy trading contracts.

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

June 30, 2022 December 31, 2021

September 30,

2022 December 31,

2.25 % convertible notes due 2027 (1)

1 unchanged sentence

4.00 % convertible notes due 2024 (2)

64,000 64,000

4.125 % convertible notes due 2022 (3)

34,316 34,316

Green Plains SPE LLC:

12 unchanged sentences

Total long-term debt $ 495,269 $ 514,006

(1) Includes $ 5.9 million and $ 6.5 million of unamortized debt issuance costs as of June 30, 2022 and December 31, 2021, respectively.

(2) Includes $ 1.0 million and $ 1.2 million of unamortized debt issuance costs as of June 30, 2022 and December 31, 2021, respectively.

Subsequent to June 30, 2022, the 2024 notes were converted into shares of common stock of the Company.

(3) Includes $ 31 thousand and 0.1 million of unamortized debt issuance costs as of June 30, 2022 and December 31, 2021, respectively.

(4) Includes $ 0.8 million and $ 0.9 million of unamortized debt issuance costs as of June 30, 2022 and December 31, 2021, respectively.

(5) Includes $ 0.3 million of unamortized debt issuance costs as of both June 30, 2022 and December 31, 2021, respectively.

(6) Includes $ 0.5 million of unamortized debt issuance costs as of both June 30, 2022 and December 31, 2021, respectively.

(1) Includes $ 5.6 million and $ 6.5 million of unamortized debt issuance costs as of September 30, 2022 and December 31, 2021, respectively.

(2) The 2024 notes were converted into shares of common stock of the company and were retired effective July 8, 2022.

Includes $ 1.2 million of unamortized debt issuance costs as of December 31, 2021.

(3) The 2022 notes were converted into shares of common stock of the company and settled in cash, and were retired upon maturity, effective September 1, 2022.

Includes $ 0.1 million of unamortized debt issuance costs as of December 31, 2021.

(4) Includes $ 0.7 million and $ 0.9 million of unamortized debt issuance costs as of September 30, 2022 and December 31, 2021, respectively.

(5) Includes $ 0.3 million of unamortized debt issuance costs as of both September 30, 2022 and December 31, 2021, respectively.

(6) Includes $ 0.5 million of unamortized debt issuance costs as of both September 30, 2022 and December 31, 2021, respectively.

(7) On February 11, 2022, the term loan was modified to allow Green Plains Partners and its affiliates to repurchase outstanding notes.

1 unchanged sentence

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

June 30, 2022 December 31, 2021

September 30,

2022 December 31,

Green Plains Finance Company, Green Plains Grain and Green Plains Trade:

8 unchanged sentences

$ 100.0 million revolver

$ 50.0 million inventory financing

$ 206,102 $ 173,418

3 unchanged sentences

The 2.25 % notes are senior, unsecured obligations of the company.

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).

However, before September 15, 2026, the 2.25 % notes will not be convertible unless certain conditions

are satisfied.

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).

However, before September 15, 2026, the 2.25 % notes will not be convertible unless certain conditions are satisfied.

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.

10 unchanged sentences

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.

The 4.00 % notes will be convertible, at the option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common stock, or a combination of cash and shares of the company’s common stock until the close of business on the scheduled trading day immediately preceding the maturity date.

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.

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.

The 4.00 % notes were 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.

The 4.00 % notes were convertible, at the option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common stock, or a combination of cash and shares of the company’s common stock until the close of business on the scheduled trading day immediately preceding the maturity date.

The initial conversion rate was 64.1540 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately $ 15.59 per share.

The company increased the final conversion rate to 66.4178 in connection with the company’s calling the 4.00 % notes for redemption on May 25, 2022.

During May 2021, the company entered into a privately negotiated agreement with certain noteholders of the company’s 4.00 % notes.

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Pursuant to the guidance within ASC 470, Debt , the company recorded a loss of $ 9.5 million which was recorded as a charge to interest expense in the consolidated financial statements during the three months ended June 30, 2021, of which $ 1.2 million related to unamortized debt issuance costs.

On May 25, 2022, the company gave notice calling for the redemption of its outstanding 4.00 % convertible notes, totaling an aggregate principal amount of $ 64.0 million.

On May 25, 2022, the company gave notice calling for the redemption of its outstanding 4.00 % notes, totaling an aggregate principal amount of $ 64.0 million.

The conversion rate was 66.4178 shares of common stock per $1,000 of principal.

From July 1, 2022 through July 8, 2022, the remaining $ 64.0 million of the 4.00 % convertible notes were converted into approximately 4.3 million shares of common stock.

From July 1, 2022 through July 8, 2022, the remaining $ 64.0 million of the 4.00 % notes were converted into approximately 4.3 million shares of common stock.

Common stock held as treasury shares were exchanged for the 4.00 % notes.

Pursuant to the guidance within ASC 470, Debt , the company recorded the exchanges as a conversion.

The 4.00 % notes were retired effective July 8, 2022.

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

The 4.125 % notes are senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year.

The company anticipates it will settle the 4.125 % notes in a combination of cash and common stock.

The notes are convertible at the Holder’s option.

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.

The conversion rate will be subject to adjustment upon the occurrence of certain events, including but not limited to;

The 4.125 % notes were senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year.

The notes were convertible at the Holder’s option.

The initial conversion rate was 35.7143 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately $ 28.00 per share.

The conversion rate was subject to adjustment upon the occurrence of certain events, including but not limited to;

the event of a stock dividend or stock split;

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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.

The redemption price will equal 100 % of the principal plus any accrued and unpaid interest.

Holders of the 4.125 % notes have the option to require the company to repurchase the 4.125 % notes in cash at a price equal to 100 % of the principal plus accrued and unpaid

interest when there is a fundamental change, such as change in control.

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

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.

Pursuant to the guidance within ASC 470, Debt , the company recorded a loss upon extinguishment of $ 22.1 million.

Pursuant to the guidance within ASC 470, Debt , the company recorded a loss

upon extinguishment of $ 22.1 million.

This charge included $ 1.2 million of unamortized debt issuance costs related to the principal balance extinguished.

During August 2022, the company entered into four privately negotiated exchange agreements with certain noteholders of the 4.125 % notes to exchange approximately $ 32.6 million aggregate principal amount for approximately 1.2 million shares of the company's common stock.

Pursuant to the guidance within ASC 470, Debt , the company recorded the exchanges as a conversion and recorded a loss of $ 419 thousand, which was recorded as a charge to interest expense in the consolidated financial statements during the three months ended September 30, 2022.

Additionally, on September 1, 2022, approximately $ 1.7 million aggregate principal amount of the 4.125 % notes were settled through a combination of $ 1.7 million in cash and approximately 15 thousand shares of the company's common stock.

The remaining $ 23 thousand aggregate principal amount and accrued interest were settled in cash.

The 4.125 % notes were fully retired effective September 1, 2022.

Agribusiness and Energy Services Segment

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The Facility is secured by the working capital assets of the Borrowers and is guaranteed by the company.

Green Plains Grain has entered into a $ 50.0 million short-term inventory financing agreement with a financial institution.

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

This agreement is subject to negotiated variable interest rates, which equaled 4.66 % as of June 30, 2022.

The company had $ 17.5 million short-term notes payable related to the inventory financing agreement as of June 30, 2022.

Green Plains Commodity Management has an uncommitted $ 40.0 million revolving credit facility which matures April 30, 2023, to finance margins related to its hedging programs.

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

The company had $ 10.9 million short-term notes payable related to this credit facility as of June 30, 2022.

The company had $ 11.1 million short-term notes payable related to this credit facility as of September 30, 2022.

Green Plains Grain has a short-term inventory financing agreement with a financial institution.

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

This agreement is subject to negotiated variable interest rates.

The company had no outstanding short-term notes payable related to the inventory financing agreement as of September 30, 2022.

Ethanol Production Segment

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The Junior Notes accrue interest at an annual rate of 11.75 %.

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.

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.

The entire outstanding principal balance, plus any accrued and unpaid interest is due upon maturity.

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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.

Funds associated with the Junior Notes are administered by a trustee and are included in the balance of restricted cash as of June 30, 2022.

Funds associated with the Junior Notes are administered by a trustee and a portion are included in the balance of restricted cash as of September 30, 2022.

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.

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The consolidated leverage ratio is calculated by dividing total funded indebtedness by the sum of the four preceding fiscal quarters’ consolidated EBITDA.

The consolidated debt service coverage ratio is calculated by taking the sum of the four preceding fiscal quarters’ consolidated EBITDA minus income taxes and consolidated capital expenditures for such period divided by the sum of the four preceding fiscal quarters’ consolidated interest charges plus consolidated scheduled funded debt payments for such period.

The consolidated debt service

coverage ratio is calculated by taking the sum of the four preceding fiscal quarters’ consolidated EBITDA minus income taxes and consolidated capital expenditures for such period divided by the sum of the four preceding fiscal quarters’ consolidated interest charges plus consolidated scheduled funded debt payments for such period.

Under the amended terms of the loan, the partnership has no restrictions on the amount of quarterly distribution payments, so long as (i) no default has occurred and is continuing, or would result from payment of the distribution, and (ii) the partnership and its subsidiaries are in compliance with its financial covenants and remain in compliance after payment of the distribution.

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Covenant Compliance

The company was in compliance with its debt covenants as of June 30, 2022.

The company was in compliance with its debt covenants as of September 30, 2022.

Restricted Net Assets

At June 30, 2022, there were approximately $ 109.5 million of net assets at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

At September 30, 2022, there were approximately $ 115.4 million of net assets at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

STOCK-BASED COMPENSATION

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Restricted Stock Awards and Deferred Stock Units

The non-vested stock award and deferred stock unit activity for the six months ended June 30, 2022, is as follows:

The non-vested stock award and deferred stock unit activity for the nine months ended September 30, 2022, is as follows:

Deferred Stock

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Vested ( 276,856 ) 15.79

Non-Vested at June 30, 2022 800,073 $ 19.82 2.2

Non-Vested at September 30, 2022 800,405 $ 19.83 2.0

Performance Shares

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The performance shares were granted at a target of 100 %, but each performance share was reduced or increased depending on results for the performance period for the company’s average return on net assets, and the company’s total shareholder return relative to that of the company’s performance peer group.

On February 19,

2022, based on the criteria discussed above, the 149,933 2019 performance shares vested at 75 %, which resulted in the issuance of 112,450 shares of common stock.

The non-vested performance share award activity for the six months ended June 30, 2022, is as follows:

On February 19, 2022, based on the criteria discussed above, the 149,933 2019 performance shares vested at 75 %, which resulted in the issuance of 112,450 shares of common stock.

The non-vested performance share award activity for the nine months ended September 30, 2022, is as follows:

Shares Weighted-

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Vested ( 149,933 ) 15.31

Non-Vested at June 30, 2022 482,811 $ 18.22 2.3

Non-Vested at September 30, 2022 482,811 $ 18.22 2.1

Green Plains Partners

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The partnership measures unit-based compensation related to equity awards in its consolidated financial statements over the requisite service period on a straight-line basis.

There was no change in the number of non-vested unit-based awards for the six months ended June 30, 2022.

The non-vested unit-based awards activity for the nine months ended September 30, 2022, is as follows:

Non-Vested Units Weighted-

Average Grant-

Date Fair Value Weighted-Average

Non-Vested at December 31, 2021 19,482 $ 12.32

Granted 19,707 12.18

Vested ( 19,482 ) 12.32

Non-Vested at September 30, 2022 19,707 $ 12.18 0.8

Stock-Based and Unit Based Compensation Expense

Compensation costs for stock-based and unit-based payment plans were $ 2.4 million and $ 4.3 million for the three and six months ended June 30, 2022, respectively, and $ 1.1 million and $ 2.0 million for the three and six months ended June 30, 2021, respectively.

At June 30, 2022, there was $ 17.9 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards.

Compensation costs for stock-based and unit-based payment plans were $ 2.4 million and $ 6.6 million for the three and nine months ended September 30, 2022, respectively, and $ 2.0 million and $ 4.0 million for the three and nine months ended September 30, 2021, respectively.

At September 30, 2022, there was $ 15.6 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 2.0 years.

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Basic earnings per share, or EPS, is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.

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.

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.

The basic and diluted EPS are calculated as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ ( 15,076 ) $ 3,198

Weighted average shares outstanding - basic 53,033 45,425 52,960 41,581

EPS - basic $ 0.87 $ 0.21 $ ( 0.28 ) $ 0.08

EPS - diluted:

Net income (loss) attributable to Green Plains $ 46,398 $ 9,743 $ ( 15,076 ) $ 3,198

Interest and amortization on convertible debt, net of tax effect:

4.125 % convertible notes due 2022

4.00 % convertible notes due 2024

2.25 % convertible notes due 2027

1,261 1,216 — —

Net income (loss) attributable to Green Plains - diluted $ 48,569 $ 11,536 $ ( 15,076 ) $ 3,198

Weighted average shares outstanding - basic 53,033 45,425 52,960 41,581

Effect of dilutive convertible debt:

4.125 % convertible notes due 2022

4.00 % convertible notes due 2024

4,106 4,106 — —

2.25 % convertible notes due 2027

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Effect of dilutive warrants 757 669 — 345

Effect of dilutive stock-based compensation awards 500 698 — 749

Weighted average shares outstanding - diluted 66,895 58,171 52,960 42,675

EPS - diluted $ 0.73 $ 0.20 $ ( 0.28 ) $ 0.07

EPS - basic and diluted:

Net loss attributable to Green Plains $ ( 73,526 ) $ ( 59,622 ) $ ( 88,602 ) $ ( 56,424 )

Weighted average shares outstanding - basic and diluted 57,677 50,482 54,550 44,581

EPS - basic and diluted $ ( 1.27 ) $ ( 1.18 ) $ ( 1.62 ) $ ( 1.27 )

Anti-dilutive weighted-average convertible debt, warrants and stock-based compensation (1)

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(1) The effect related to the company’s convertible debt, warrants and certain stock-based compensation awards has been excluded from diluted EPS for the periods presented as the inclusion of these shares would have been antidilutive.

For the three months ended June 30, 2021, the company excluded the impact of the 4.125 % convertible notes due in 2022, and associated interest and amortization, as inclusion would be anti-dilutive.

For the six months ended June 30, 2021, the company excluded the impact of the 4.125 % convertible notes due in 2022, 4.00 % convertible notes due in 2024 and the 2.25 % convertible notes due in 2027, and associated interest and amortization, as inclusion would be anti-dilutive.

STOCKHOLDERS’ EQUITY

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On May 18, 2021, the company completed a privately negotiated exchange agreement with certain noteholders of the company’s 4.00 % notes, pursuant to which the noteholders agreed to exchange $ 51.0 million in aggregate principal for 3,568,705 shares of the company’s common stock at an implied price of $ 26.80 .

Components of stockholders’ equity for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands):

On May 25, 2022, the company gave notice calling for the redemption of all its outstanding 4.00 % Convertible Senior Notes due 2024, totaling an aggregate principal amount of $ 64.0 million.

The conversion rate was 66.4178 shares of common stock per $1,000 of principal.

From July 1, 2022 through July 8, 2022, all $ 64.0 million of the 4.00 % convertible notes were converted into approximately 4.3 million shares of common stock.

During August 2022, the company entered into four privately negotiated exchange agreements with certain noteholders of the 4.125 % Convertible Senior Notes due 2022 to exchange approximately $ 32.6 million aggregate principal amount for approximately 1.2 million shares of the company's common stock.

Additionally, on September 1, 2022, approximately $ 1.7 million aggregate principal amount was settled through a combination of $ 1.7 million in cash and approximately 15 thousand shares of the company's common stock.

Components of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 are as follows (in thousands):

Common Stock Additional

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Balance, June 30, 2022 62,087 62 1,069,921 ( 30,275 ) ( 16,909 ) 8,244 ( 91,626 ) 931,173 150,556 1,081,729

Net income (loss) — — — ( 73,526 ) — — — ( 73,526 ) 5,623 ( 67,903 )

Distributions declared — — — — — — — — ( 5,247 ) ( 5,247 )

Other comprehensive income (loss) before reclassification — — — — 7,740 — — 7,740 — 7,740

Amounts reclassified from accumulated other comprehensive income (loss) — — — — ( 1,662 ) — — ( 1,662 ) — ( 1,662 )

Other comprehensive income (loss), net of tax — — — — 6,078 — — 6,078 — 6,078

Exchange of 4.125 % convertible notes due 2022

— — 19,756 — — ( 1,188 ) 13,211 32,967 — 32,967

Redemption of 4.00 % convertible notes due 2024

— — 15,797 — — ( 4,251 ) 47,241 63,038 — 63,038

Investment in subsidiary — — — — — — — — 199 199

Stock-based compensation 1 — 2,312 — — — — 2,312 61 2,373

Balance, September 30, 2022 62,088 $ 62 $ 1,107,786 $ ( 103,801 ) $ ( 10,831 ) 2,805 $ ( 31,174 ) $ 962,042 $ 151,192 $ 1,113,234

Common Stock Additional

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Shares Amount Shares Amount

Balance, December 31, 2020 47,471 $ 47 $ 691,393 $ 50,793 $ ( 2,172 ) 11,813 $ ( 131,287 ) $ 608,774 $ 129,812 $ 738,586

Balance, January 1, 2021 47,471 $ 47 $ 691,393 $ 50,793 $ ( 2,172 ) 11,813 $ ( 131,287 ) $ 608,774 $ 129,812 $ 738,586

Net income (loss) — — — ( 6,545 ) — — — ( 6,545 ) 4,566 ( 1,979 )

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Other comprehensive income (loss), net of tax — — — — ( 6,226 ) — — ( 6,226 ) — ( 6,226 )

Investment in subsidiaries — — — — — — — — 3,330 3,330

Investment in subsidiary — — — — — — — — 3,330 3,330

Issuance of warrants — — 3,431 — — — — 3,431 ( 3,431 ) —

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— — 17,679 — — ( 3,569 ) 39,661 57,340 — 57,340

Acquisition of FQT — $ — $ — $ — $ — — $ — $ — $ 1,861 $ 1,861

Warrant liability — $ — $ — $ — $ — — $ — $ — $ 1,278 $ 1,278

Investment in subsidiary — — — — — — — — 3,139 3,139

Stock-based compensation ( 20 ) 4 324 — — — — 328 80 408

Balance, June 30, 2021 56,433 60 900,952 53,991 694 8,244 ( 91,626 ) 864,071 141,159 1,005,230

Net income (loss) — — — ( 59,622 ) — — — ( 59,622 ) 5,211 ( 54,411 )

Distributions declared — — — — — — — — ( 1,397 ) ( 1,397 )

Other comprehensive income (loss) before reclassification — — — — 538 — — 538 — 538

Amounts reclassified from accumulated other comprehensive income (loss) — — — — ( 194 ) — — ( 194 ) — ( 194 )

Other comprehensive income (loss), net of tax — — — — 344 — — 344 — 344

Investment in subsidiary — — — — — — — — 1,156 1,156

Issuance of common stock for cash at $ 32.00 per share, net of fees

5,463 5 164,872 — — — — 164,877 — 164,877

Stock-based compensation ( 57 ) — 1,759 — — — — 1,759 60 1,819

Balance, September 30, 2021 61,839 $ 65 $ 1,067,583 $ ( 5,631 ) $ 1,038 8,244 $ ( 91,626 ) $ 971,429 $ 146,189 $ 1,117,618

Amounts reclassified from accumulated other comprehensive income are as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

June 30, Statements of

September 30, Nine Months Ended

September 30, Statements of

Classification

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Commodity derivatives ( 4,760 ) 947 ( 3,748 ) 36,431 (2)

Total losses on cash flow hedges ( 3,393 ) ( 5,207 ) ( 727 ) ( 3,396 ) (3)

Income tax benefit 878 1,246 177 812 (4)

Amounts reclassified from accumulated other comprehensive loss $ ( 2,515 ) $ ( 3,961 ) $ ( 550 ) $ ( 2,584 )

Total gains (losses) on cash flow hedges 2,198 256 1,471 ( 3,140 ) (3)

Income tax benefit (expense) ( 536 ) ( 62 ) ( 359 ) 750 (4)

Amounts reclassified from accumulated other comprehensive income (loss) $ 1,662 $ 194 $ 1,112 $ ( 2,390 )

(2) Costs of goods sold

(3) Income (loss) before income taxes and income (loss) from equity method investees

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

(4) Income tax benefit (expense)

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As a result, the consolidated financial statements do not reflect income taxes on pre-tax income or loss attributable to the noncontrolling interest in the partnership.

The company recorded income tax expense of $ 2.9 million for the three months ended June 30, 2022, compared with income tax benefit of $ 4.8 million for the same period in 2021.

The increase in the amount of tax expense recorded for the three months ended June 30, 2022 was primarily due to an increase in the valuation allowance recorded against deferred tax assets related to gains (losses) on derivatives included in accumulated other comprehensive income.

The Inflation Reduction Act (IRA), was signed into law on August 16, 2022.

The IRA includes significant law changes relating to tax, climate change, energy and health care.

The IRA significantly expands clean energy incentives by providing an estimated $ 370 billion of new energy related tax credits over the next ten years.

It also permits more flexibility for taxpayers to use the credits with direct-pay and transferable credit options.

In addition, the IRA includes key revenue-raising provisions which include a 15% book-income alternative minimum tax on corporations with adjusted financial statement income over $ 1 billion, a 1% excise tax on the value of certain net stock repurchases by publicly traded companies, and the reinstatement of Superfund excise taxes.

The company expects it will benefit from certain energy related tax credits in future years and not be negatively impacted by the revenue raising provisions;

however, the company does not have enough information to provide a reasonable estimate of future tax benefits at this time.

The company recorded income tax benefit of $ 1.9 million for the three months ended September 30, 2022, compared with income tax expense of $ 7 thousand for the same period in 2021.

The increase in the amount of tax benefit recorded for the three months ended September 30, 2022 was primarily due to a decrease in the valuation allowance recorded against deferred tax assets related to gains (losses) on derivatives included in accumulated other comprehensive income.

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.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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

June 30, 2022 December 31, 2021

September 30,

2022 December 31,

Weighted average remaining lease term 5.2 years 5.5 years

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Year Ending December 31, Amount

2022 $ 10,455

Thereafter 14,839

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Commodities, Storage and Transportation

As of June 30, 2022, the company had contracted future purchases of grain, natural gas, and distillers grains, valued at approximately $ 511.9 million and future commitments for storage and transportation, valued at approximately $ 25.6 million.

As of September 30, 2022, the company had contracted future purchases of ethanol, grain, natural gas, and distillers grains, valued at approximately $ 366.0 million and future commitments for storage and transportation, valued at approximately $ 27.8 million.

Government Assistance

During the three months ended June 30, 2022, the company received a relief grant from the USDA related to the Biofuel Producer Program authorized as part of the CARES Act to offset market losses as a result of the COVID-19 pandemic.

During the nine months ended September 30, 2022, the company received a relief grant from the USDA related to the Biofuel Producer Program authorized as part of the CARES Act to offset market losses as a result of the COVID-19 pandemic.

The total cash grant received of $ 27.7 million was recorded as other income and the company has no further reporting or other obligations related to the receipt of this grant.

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

What changed 10-Q

Item 1. Financial Statements