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These statements may be identified by words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “predict,” “may,” “could,” “should,” “will” and similar expressions, as well as statements regarding future operating or financial performance or guidance, business strategy, environment, key trends and benefits of actual or planned acquisitions.
−Removed: Factors that could cause actual results to differ from those expressed or implied in the forward-looking statements include, but are not limited to, those discussed in Part I, Item 1A – Risk Factors of our annual report on Form 10-K for the year ended December 31, 2021, Part II, Item 1A – Risk Factors in this report, or incorporated by reference.
+Added: Factors that could cause actual results to differ from those expressed or implied in the forward-looking statements include, but are not limited to, those discussed in Part I, Item 1A – Risk Factors of our annual report on Form 10-K for the year ended December 31, 2022, or incorporated by reference.
Specifically, we may experience fluctuations in future operating results due to a number of economic conditions, including:
−Removed: disruption caused by health epidemics, such as the COVID-19 outbreak;
competition in the ethanol industry and other industries in which we operate;
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risks associated with merchant trading;
−Removed: risks related to our equity method investees and other factors detailed in reports filed with the SEC.
+Added: risks related to our equity method investees;
+Added: disruption caused by health epidemics, such as the COVID-19 outbreak;
+Added: and other factors detailed in reports filed with the SEC.
Additional risks related to Green Plains Partners LP include compliance with commercial contractual obligations, potential tax consequences related to our investment in the partnership and risks disclosed in the partnership’s SEC filings associated with the operation of the partnership as a separate, publicly traded entity.
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We caution investors not to place undue reliance on forward-looking statements, which represent management’s views as of the date of this report or documents incorporated by reference.
−Removed: Green Plains is an Iowa corporation founded in June 2004 as a producer of low carbon fuels and has grown to be a leading ag-tech innovator.
−Removed: We continue the transition from a commodity-processing business to a value-added agricultural technology company creating sustainable, high-value ingredients.
−Removed: In addition, we are currently undergoing a number of project initiatives to generate higher non-cyclical margins.
−Removed: We believe we can further increase margins by producing additional value-added ingredients, such as Ultra-High Protein, dextrose and more.
−Removed: In December 2020, we completed the purchase of a majority interest in FQT.
−Removed: The acquisition capitalizes on the core strengths of each company to develop and implement proven, agriculture, food and industrial biotechnology systems, rapidly expand installation and production across Green Plains facilities, and offer these technologies to the biofuels industry.
−Removed: Additionally, we have taken advantage of opportunities to divest certain assets in recent years to reallocate capital toward our current growth initiatives.
−Removed: We are focused on generating stable operating margins through our business segments and risk management strategy.
−Removed: We formed Green Plains Partners LP, a master limited partnership, to be our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce.
−Removed: The partnership completed its initial public offering on July 1, 2015.
−Removed: As of September 30, 2022, we own a 48.8% limited partner interest, a
−Removed: 2.0% general partner interest and all of the partnership’s incentive distribution rights.
+Added: Green Plains is an Iowa corporation, founded in June 2004 as a producer of low carbon fuels and has grown to be a leading biorefining company maximizing the potential of existing resources through fermentation and patented agribusiness technologies.
+Added: We continue the transition from a commodity-processing business to a value-added agricultural technology company creating sustainable, high-value ingredients from existing resources.
+Added: To that end, we are currently executing on a number of initiatives to allow for product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as Ultra-High Protein, dextrose, renewable corn oil and more.
+Added: We are developing and implementing proven agricultural, food and industrial biotechnology systems that allow for product diversification and new market opportunities, rapidly expanding installation and production across our facilities, and offering these technologies to the broader biofuels industry.
+Added: Green Plains Partners LP, a master limited partnership, is our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce.
+Added: As of March 31, 2023, we own a 48.8% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights.
The public owns the remaining 49.2% limited partner interest.
−Removed: The partnership is consolidated in our financial statements.
+Added: The partnership is consolidated in our financial statements, and record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.
We group our business activities into the following three operating segments to manage performance:
• Ethanol Production.
−Removed: Our ethanol production segment includes the production of ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein and corn oil at 11 ethanol plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee.
−Removed: At capacity, our facilities are capable of processing approximately 330 million bushels of corn per year and producing approximately 1 billion gallons of ethanol, 2.5 million tons of distillers grains and Ultra-High Protein and 290 million pounds of industrial grade corn oil, making us one of the largest ethanol producers in North America.
+Added: Our ethanol production segment includes the production of ethanol, distillers grains, Ultra-High Protein and renewable corn oil at eleven ethanol plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee.
+Added: At capacity, our facilities are capable of processing approximately 330 million bushels of corn per year and producing approximately 958 million gallons of ethanol, 2.4 million tons of distillers grains and Ultra-High Protein and 310 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel and renewable diesel.
+Added: We are one of the largest ethanol producers in North America.
• Agribusiness and Energy Services.
−Removed: Our agribusiness and energy services segment includes grain procurement, with approximately 27 million bushels of grain storage capacity, and our commodity marketing business, which markets, sells and distributes ethanol, distillers grains, Ultra-High Protein and corn oil produced at our ethanol plants.
−Removed: We also market ethanol for a third-party producer as well as buy and sell ethanol, including industrial-grade alcohol, distillers grains, Ultra-High Protein, corn oil, grain, natural gas and other commodities in various markets.
+Added: Our agribusiness and energy services segment includes grain procurement, with approximately 26.5 million bushels of grain storage capacity, and our commodity marketing business, which markets, sells and distributes the ethanol, distillers grains, Ultra-High Protein and renewable corn oil produced at our ethanol plants.
+Added: We also market ethanol for a third-party producer as well as buy and sell ethanol, distillers grains, Ultra-High Protein, renewable corn oil, grain, natural gas and other commodities in various markets.
• Partnership.
−Removed: Our master limited partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses.
+Added: Our master limited partnership provides fuel storage and transportation services through owning, operating, developing and acquiring ethanol and fuel storage tanks, terminals, transportation assets and other related assets and businesses.
The partnership’s assets include 27 ethanol storage facilities, two fuel terminal facilities and approximately 2,300 leased railcars.
−Removed: As part of our transformation to a value-add agricultural technology company, we completed our first MSC TM installation at our Shenandoah, Iowa, biorefinery during the first quarter of 2020.
−Removed: Our Wood River, Nebraska, plant began MSC TM operations in October 2021.
−Removed: Commissioning on our MSC TM installation at our Central City plant began during the third quarter with two additional locations slated to begin commissioning in the fourth quarter of 2022.
−Removed: Installation at certain of our remaining biorefineries is expected over the course of the next few years.
−Removed: Through our value-added ingredients initiative, we expect to produce Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater and yeast concentrations of 25%, increase production of renewable corn oil and produce other higher value products, such as post-MSC distillers grains.
−Removed: We have also upgraded our York facility to include USP grade alcohol capabilities.
−Removed: We began pilot scale batch operations at the CST TM production facility at our Innovation Center at York in the second quarter of 2021, which allows for the production of both food and industrial grade low-carbon glucose and dextrose to target applications in food production, renewable chemicals and synthetic biology.
+Added: We have installed and are operating FQT MSC™ technology at five of our biorefineries.
+Added: Through our value-added ingredients initiative, we produce Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater and yeast concentrations of 25%, increase production of renewable corn oil and produce other higher value products, such as post-MSC TM distillers grains.
+Added: We began pilot scale batch operations at the FQT CST TM production facility at our Innovation Center at York in the second quarter of 2021, which allows for the production of both food and industrial grade low-carbon glucose and dextrose to target applications in food production, renewable chemicals and synthetic biology.
In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT CST TM at commercial scale.
We also anticipate modifying additional biorefineries to include FQT CST TM production capabilities to meet anticipated future customer demands.
−Removed: In February and April 2021, as part of our carbon reduction strategy, we committed our Nebraska, Iowa and Minnesota plants to the Summit Carbon Solutions Midwest Carbon Express project to capture and store biogenic carbon dioxide produced through the fermentation process.
−Removed: These eight biorefineries have entered into twelve-year carbon offtake agreements, which will lower greenhouse gas emissions through the capture of carbon dioxide at each of the biorefineries, significantly lowering their carbon intensity.
−Removed: According to Summit Carbon Solutions, the anticipated completion date for this project is 2024.
−Removed: Our profitability is highly dependent on commodity prices, particularly for ethanol, industrial alcohol, distillers grains, corn oil, soybean meal, corn, and natural gas.
+Added: Additionally, we have taken advantage of opportunities to divest certain assets to reallocate capital toward our current growth initiatives.
+Added: We are focused on generating stable and growing operating margins through our business segments and risk management strategy.
+Added: Our profitability is highly dependent on commodity prices, particularly for ethanol, distillers grains, renewable corn oil, soybean meal, corn, and natural gas.
Since market price fluctuations of these commodities are not always correlated, our operations may be unprofitable at times.
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Recent Developments
−Removed: Convertible Notes Conversion into Common Stock
−Removed: On May 25, 2022, we gave notice calling for the redemption of all our outstanding 4.00% Convertible Senior Notes due 2024, totaling an aggregate principal amount of $64.0 million.
−Removed: The conversion rate was 66.4178 shares of common stock per $1,000 of principal.
−Removed: 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.
−Removed: All $64.0 million were retired effective July 8, 2022.
−Removed: During August 2022, we 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 our common stock.
−Removed: 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 our common stock.
−Removed: The remaining $23 thousand aggregate principal amount of the 4.125% notes and accrued interest were settled in cash.
−Removed: The 4.125% notes were retired effective September 1, 2022.
+Added: On April 17, 2023, during routine maintenance on a whole stillage tank, we experienced an explosion at our Wood River, Nebraska facility, which resulted in the fatality of one employee as well as another employee being critically injured.
+Added: The plant was not operating at the time of the explosion.
+Added: We continue to work with various regulatory agencies, state and local authorities and our insurance providers in investigating the cause and impact of the incident.
+Added: We do not currently believe the incident will have a material impact on our consolidated financial statements.
Results of Operations
−Removed: During the third quarter of 2022, we experienced a weak ethanol margin environment due in part to historically high physical corn basis levels across our entire platform.
−Removed: We maintained an average utilization rate of approximately 90.9% of capacity, resulting in ethanol production of 219.4 mmg for the third quarter of 2022, compared with 181.2 mmg, or 75.0% of capacity, for the same quarter last year.
−Removed: The increase in the average utilization rate was primarily due to completing our plant modernization and upgrade program earlier this year.
+Added: During the first quarter of 2023, we experienced a weak ethanol margin environment due in part to historically high physical corn basis levels across our entire platform.
+Added: We maintained an average utilization rate of approximately 87.5% of capacity, resulting in ethanol production of 206.7 mmg for the first quarter of 2023, compared with 196.3 mmg, or 83.1% of capacity, for the same quarter last year.
Our operating strategy is to transform our company to a value-add agricultural technology company.
Depending on the margin environment, we may exercise operational discretion that results in reductions in production volumes.
−Removed: It is possible that throughput volumes could be below our minimum volume commitments made to the partnership in the future, depending on various factors that drive each biorefineries variable contribution margin, including future driving and gasoline demand for the industry, demand for valuable coproducts we produce, and the supply and pricing of renewable feedstocks needed to operate our biorefineries.
−Removed: We are currently producing Ultra-High Protein at two locations, commissioned a third plant in the third quarter, and are deploying FQT MSC TM technology at two additional locations, which we expect to be commissioned in the fourth quarter of 2022.
−Removed: We are deploying the FQT MSC™ technology at select locations across our platform to help meet growing global demand for protein feed ingredients and low-carbon renewable corn oil.
+Added: It is possible that throughput volumes could be below our minimum volume commitments made to the partnership in the future, depending on various factors that drive each biorefineries variable
+Added: contribution margin, including future driving and gasoline demand for the industry, demand for valuable coproducts we produce, and the supply and pricing of renewable feedstocks needed to operate our biorefineries.
+Added: We are currently producing Ultra-High Protein at five locations and we are deploying the FQT MSC™ technology at select additional locations across our platform to help meet growing global demand for protein feed ingredients and low-carbon renewable corn oil.
Ethanol Supply and Demand
−Removed: According to the EIA, domestic ethanol production averaged 979 thousand barrels per day during the third quarter of 2022, which was 0.5% higher than the 974 thousand barrels per day for the same quarter last year.
−Removed: Refiner and blender input volume was 902 thousand barrels per day for the third quarter of 2022, compared with 919 thousand barrels per day for the same quarter last year.
−Removed: Gasoline demand decreased 0.6 million barrels per day, or 6.6% during the third quarter of 2022 compared to the prior year.
−Removed: domestic ethanol ending stocks increased by approximately 1.5 million barrels compared to the prior year, or 7.2%, to 21.7 million barrels as of September 30, 2022.
−Removed: As of this filing, according to Prime the Pump, there were approximately 2,743 retail stations selling E15 in 31 states, up from 2,555 at the beginning of the year, and approximately 386 suppliers at 113 pipeline terminal locations now offering E15 to wholesale customers.
+Added: According to the EIA, domestic ethanol production averaged 1.01 million barrels per day during the first quarter of 2023, which was 1.0% lower than the 1.02 million barrels per day for the same quarter last year.
+Added: Refiner and blender input volume was 853 thousand barrels per day for the first quarter of 2023, compared with 840 thousand barrels per day for the same quarter last year.
+Added: Gasoline demand for the first quarter of 2023 was in line with the prior year quarter at 8.6 million barrels per day.
+Added: domestic ethanol ending stocks decreased by approximately 1.4 million barrels compared to the prior year, or 5.3%, to 25.1 million barrels as of March 31, 2023.
+Added: As of this filing, according to Prime the Pump, there were approximately 386 suppliers at 113 pipeline terminal locations now offering E15 to wholesale customers.
Global Ethanol Supply and Demand
−Removed: According to the USDA Foreign Agriculture Service, domestic ethanol exports through August 31, 2022, were approximately 1,012 mmg, up from the 796 mmg for the same period of 2021.
+Added: According to the USDA Foreign Agriculture Service, domestic ethanol exports through February 28, 2023, were approximately 222 mmg, down from the 267 mmg for the same period of 2022.
Canada was the largest export destination for U.S.
ethanol accounting for 40% of domestic ethanol export volume, driven in part by their national clean fuel standard.
−Removed: South Korea, India, and the Netherlands accounted for 13%, 8%, and 7%, respectively, of U.S.
+Added: The United Kingdom, South Korea, the Netherlands, and Mexico accounted for 12%, 11%, 5% and 5%, respectively, of U.S.
ethanol exports.
−Removed: We currently estimate that net ethanol exports will range from 1.3 to 1.5 billion gallons in 2022, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce green house gas emissions through low carbon fuel programs and eliminate MTBE from their own fuel supplies.
−Removed: The recent strengthening of the U.S.
+Added: We currently estimate that net ethanol exports will range from 1.3 to 1.5 billion gallons in 2023, based on historical demand from a variety of countries and certain countries that seek to improve their air quality, reduce greenhouse gas emissions through low carbon fuel programs and eliminate MTBE from their own fuel supplies.
+Added: The strength of the U.S.
Dollar relative to other currencies has the potential to adversely impact the U.S.
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Legislation and Regulation
−Removed: We are sensitive to government programs and policies that affect the supply and demand for ethanol and other fuels, which in turn may impact the volume of ethanol and other fuels we handle.
+Added: We are sensitive to government programs and policies that affect the supply and demand for ethanol and other fuels, which in turn may impact the volume of ethanol and other products we handle.
Over the years, various bills and amendments have been proposed in the House and Senate, which would eliminate the RFS entirely, eliminate the corn based ethanol portion of the mandate, and make it more difficult to sell fuel blends with higher levels of ethanol.
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We believe it is unlikely that any of these bills will become law in the current Congress.
−Removed: addition, the manner in which the EPA administers the RFS and related regulations can have a significant impact on the actual amount of ethanol and other biofuels blended into the domestic fuel supply.
+Added: In addition, the manner in which the EPA administers the RFS and related regulations can have a significant impact on the actual amount of ethanol and other biofuels blended into the domestic fuel supply.
Federal mandates and state-level clean fuel programs supporting the use of renewable fuels are a significant driver of ethanol demand in the U.S.
−Removed: Ethanol policies are influenced by concerns for the environment, diversifying the fuel supply, and reducing the country’s dependence on foreign oil.
−Removed: Consumer acceptance of FFVs and higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in U.S.
−Removed: surface transportation fleet market share.
−Removed: In addition, expansion of clean fuel programs in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how it is structured.
+Added: Ethanol policies are influenced by concerns for the environment, diversifying the fuel supply, supporting agricultural production and reducing the country’s dependence on foreign oil.
+Added: Consumer acceptance of FFVs and higher ethanol blends in non-FFVs may be necessary before ethanol can achieve further growth in the U.S.
+Added: light duty surface transportation fleet market share.
+Added: In addition, expansion of clean fuel programs in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how they are structured.
+Added: Incentives for automakers to produce FFVs phased out in 2020, and the EPA's recently proposed Corporate Average Fuel Economy (CAFE) standards further incentivize EV production, with the administration's stated goal of having two-thirds of vehicles sold in 2032 be EVs.
+Added: Sales of EVs in the U.S.
+Added: were close to 300,000 vehicles in the first quarter of 2023, which represented approximately 8.4% of new vehicles sales.
+Added: Transition of the light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.
The Inflation Reduction Act of 2022, which was signed into law on August 16, 2022, is a sweeping policy that could have many potential impacts on our business which we are continuing to evaluate.
−Removed: The legislation (a) created a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code, which runs from 2025 to 2027 of up to $1.00 per gallon, which could impact our fuel ethanol, depending on the level of green house gas reduction for each gallon;
−Removed: (b) created a new tax credit for sustainable aviation fuel of $1.25 to $1.75 per gallon, depending on the green house gas reduction for each gallon, that could possibly involve some of our low carbon ethanol through an alcohol to jet pathway, depending on the life cycle analysis model being used (this credit expires after 2024 and shifts to the Clean Fuel Production Credit, where it qualifies for up to $1.75 per gallon);
−Removed: (c) expanded the carbon capture and sequestration credit, section 45Q, to $85 for each ton of carbon sequestered, which could impact our carbon capture partnership and other potential carbon capture investments;
−Removed: (d) extended the biodiesel tax credit which could impact our renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production;
−Removed: (e) funded biofuel refueling infrastructure, which could impact the availability of higher level ethanol blended fuel;
−Removed: (f) increased funding for working lands conservation programs for farmers by $20 billion;
−Removed: and (g) provided credits for the production and purchase of electric vehicles, which could impact the amount of internal combustion engines built and sold longer term, and by extension impact the demand for liquid fuels including ethanol.
+Added: The legislation (1) created a new Clean Fuel Production Credit, section 45Z of the Internal Revenue Code, which runs from 2025 to 2027 of $1.00 per gallon, which could impact our fuel ethanol, depending on the level of GHG reduction for each gallon;
+Added: (2) created a new tax credit for SAF of $1.25 to $1.75 per gallon, depending on the GHG reduction for each gallon, that could possibly involve some of our low carbon ethanol through an ATJ pathway, depending on the life cycle analysis model being used (this credit expires after 2024 and shifts to the 45Z Clean Fuel Production Credit, where it qualifies for between $0.00 and $1.75 per gallon);
+Added: (3) expanded the carbon capture and sequestration credit, section 45Q of the Internal Revenue Code, to $85 for each ton of
+Added: carbon sequestered, which could impact our carbon capture partnership and other potential carbon capture investments, though it cannot be claimed in conjunction with the 45Z Clean Fuel Production Credit, which could prove to be more valuable;
+Added: (4) extended the biodiesel tax credit, which could impact our renewable corn oil values, as this co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production (this credit expires after 2024 and shifts to the 45Z Clean Fuel Production credit, where all non-SAF fuels qualify for up to $1.00 per gallon);
+Added: (5) funded biofuel blending infrastructure by $500 million, which could impact the availability of higher level ethanol blended fuel;
+Added: (6) increased funding for working lands conservation programs for farmers by $20 billion;
+Added: and (7) provided credits for the production and purchase of electric vehicles, which could impact the amount of internal combustion engines built and sold longer term, and by extension impact the demand for liquid fuels including ethanol.
+Added: There are numerous additional clean energy credits included in this law, including investment tax credits for construction of clean energy infrastructure, that could impact us and our overall competitiveness.
+Added: Regulatory rulemaking for the administration of these programs is underway, and the final regulations could impact many aspects of our business.
The RFS sets a floor for biofuels use in the United States.
−Removed: When the RFS was established in 2010, the required volume of conventional, or corn-based, ethanol to be blended with gasoline was to increase each year until it reached 15 billion gallons in 2015, which left the EPA to address existing limitations in both supply and demand.
−Removed: As of this filing, the EPA has finalized RVOs reducing the conventional ethanol levels for 2020 and 2021 to reflect lower fuel demand during the pandemic, and finalized an RVO at the statutory 15 billion gallons for 2022, with an additional 250 million gallons of supplemental volume to reflect a court-ordered remand of a previously-lowered RVO.
−Removed: The EPA has agreed to consent decree from the U.S.
−Removed: District Court for D.C.
−Removed: to propose an RVO for 2023 (and possibly 2024 and 2025) by November 16, 2022, and finalize the rule by June 14, 2023.
−Removed: It is possible the expand the types of fuels that can qualify for credits under the RFS, including the so-called e-RINs for electric vehicles.
−Removed: According to the RFS, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022, the year through which the statutorily prescribed volumes run.
−Removed: While conventional ethanol maintained 15 billion gallons, 2019 was the second consecutive year that the total RVO was more than 20% below the statutory volume levels.
−Removed: Thus, the EPA was expected to initiate a reset rulemaking, and modify statutory volumes through 2022, and do so based on the same factors they are to use in setting the RVOs post 2022.
−Removed: These factors include environmental impact, domestic energy security, expected production, infrastructure impact, consumer costs, job creation, price of agricultural commodities, food prices, and rural economic development.
−Removed: However, in late 2019, the EPA announced it would not be moving forward with a reset rulemaking in 2020.
−Removed: The current EPA has indicated they will not propose a reset rulemaking, though they have stated an intention to propose a post-2022 set rulemaking by November 16, 2022, and finalize by June 14, 2023, in compliance with a consent decree from the U.S.
+Added: As of March 31, 2023, the EPA has proposed RVOs for 2023, 2024 and 2025, setting the implied conventional ethanol levels at 15.25 billion gallons for each year, inclusive of 250 million gallons of supplemental volume in 2023 to reflect a court-ordered remand of a previously lowered RVO.
+Added: The EPA also proposed a modest increase in biomass based diesel volumes over the three years, with a large increase in advanced biofuels for 2024 and 2025, which they expect to be fulfilled by e-RINs for electric vehicles.
+Added: The EPA has agreed to a consent decree from the U.S.
District Court for D.C.
+Added: to finalize an RVO for 2023 (and possibly 2024 and 2025) by June 14, 2023.
Under the RFS, RINs and SREs are important tools impacting supply and demand.
−Removed: The EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use in each annual RVO based on their percentage of total production of domestic transportation fuel.
+Added: The EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use in each annual RVO based on their percentage of total production of domestic transportation fuel sales.
Obligated parties use RINs to show compliance with the RFS mandated volumes.
−Removed: Ethanol producers assign a RIN to each gallon of renewable fuel they produce and the RINs are detached when the renewable fuel is blended with transportation fuel domestically.
+Added: Ethanol producers assign RINs to each gallon of renewable fuel they produce and the RINs are detached when the renewable fuel is blended with transportation fuel domestically.
Market participants can trade the detached RINs in the open market.
−Removed: The market price of detached RINs affects the price of ethanol in certain markets and can influence purchasing decisions by obligated parties.
+Added: The market price of detached RINs can affect the price of ethanol in certain markets and can influence purchasing decisions by obligated parties.
+Added: Of note, the RIN mechanism for proposed e-RINs could vary from the traditional process.
As it relates to SREs, a small refinery is defined as one that processes fewer than 75,000 barrels of petroleum per day.
−Removed: Small refineries can petition the EPA for a SRE which, if approved, waives their portion of the annual RVO requirements.
−Removed: The EPA, through consultation with the DOE and the USDA can grant a full or partial waiver, or deny it outright within 90
−Removed: days of submittal.
+Added: Small refineries can petition the EPA for an SRE which, if approved, waives their portion of the annual RVO requirements.
+Added: The EPA, through consultation with the DOE and the USDA can grant them a full or partial waiver, or deny it outright within 90 days of submittal.
The EPA granted significantly more of these waivers for the 2016, 2017 and 2018 reporting years than they had in prior years, totaling 790 mmg of waived requirements for the 2016 compliance year, 1.82 billion gallons for 2017 and 1.43 billion gallons for 2018.
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In the waning days of the previous administration, the EPA approved three additional SREs, reversing one denial from 2018 and granting two from 2019.
−Removed: A total of 88 SREs were granted under the Trump Administration, erasing a total of 4.3 billion gallons of potential blending demand.
−Removed: The EPA, under the current administration, reversed the three SREs issued in the final weeks of the previous administration, and in conjunction with the RVO rulemaking for 2020, 2021 and 2022, denied all pending SREs.
−Removed: There are multiple legal challenges to how the EPA has handled SREs and RFS rulemakings.
+Added: A total of 88 SREs were granted under the previous administration, erasing a total 4.3 billion gallons of potential blending demand.
+Added: Under the current administration, the EPA reversed the three SREs issued in the final weeks of the previous administration, and in conjunction with the RVO rulemaking for 2020, 2021, and 2022, denied all pending SREs;
+Added: however, the EPA allowed for so-called "alternative compliance" for these refineries, which in practice waives their blending obligations for those years.
+Added: The EPA has reiterated their stance on denying all SRE applications in the proposed 2023, 2024 and 2025 RVO rulemaking, and there are multiple on-going legal challenges to how they have handled SREs and RFS rulemakings.
The One-Pound Waiver, which was extended in May 2019 to allow E15 to be sold year-round to all vehicles model year 2001 and newer, was challenged in an action filed in Federal District Court for the D.C.
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The Supreme Court declined to hear a challenge to this ruling.
−Removed: On April 12, 2022, the President announced that he has directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the summer months, and that the temporary waiver should be extended as long as the gasoline supply emergency lasts.
−Removed: As of this filing, E15 is sold year-round at approximately 2,743 stations in 31 states.
+Added: On April 12, 2022, the President announced that he had directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the summer months, and that the temporary waiver should be extended as long as the gasoline supply emergency lasts.
+Added: As of this filing, the administration has announced they will take the same approach with emergency waivers for the 2023 summer driving season.
+Added: The EPA has also instigated regulatory rulemaking to allow for the elimination of the One-Pound Waiver for E10 in several Midwestern states in time for the 2024 summer driving season, which would have the practical effect of allowing for E15 to be sold year round in the following states:
+Added: Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin.
In October 2019, the White House directed the USDA and EPA to move forward with rulemaking to expand access to higher blends of biofuels.
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The USDA rolled out the Higher Blend Infrastructure Incentive Program in the summer of 2020, providing competitive grants to fuel terminals and retailers for installing equipment for dispensing higher blends of ethanol and biodiesel.
−Removed: In December 2021, the USDA announced they would administer another infrastructure grant program.
−Removed: The recently enacted Inflation Reduction Act provided for an additional $500 million in USDA grants for biofuel infrastructure from 2022 to 2031.
+Added: In December 2021, the USDA announced it would administer another infrastructure grant program.
+Added: The Inflation Reduction Act, signed into law in 2022, provided for an additional $500 million in USDA grants for biofuel infrastructure from 2022 to 2031, though all the funds could be awarded in the first few years of the program.
To respond to COVID-19 health crisis and attempt to offset the subsequent economic damage, Congress passed multiple relief measures, most notably the CARES Act in March 2020, which created and funded multiple programs that have impacted our industry.
2 unchanged sentences
The language of the bill specifically included biofuels producers as eligible for some of this aid, and in May 2022, the USDA distributed funds to us in the amount of $27.7 million pursuant to this bill.
−Removed: Comparability of our Financial Results
−Removed: As of September 30, 2022, we, together with our subsidiaries, own a 48.8% limited partner interest and a 2.0% general partner interest in the partnership and own all of the partnership’s incentive distribution rights, with the remaining 49.2% limited partner interest owned by public common unitholders.
−Removed: We consolidate the financial results of the partnership, and record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.
−Removed: There are various events that affect comparability of our operating results from 2022 to 2021, including ethanol production rates and the disposition of our Ord, Nebraska plant in March 2021.
+Added: Environmental and Other Regulation
+Added: Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol, crude oil and other liquid hydrocarbon materials.
+Added: Compliance with existing and anticipated environmental laws and regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate, and upgrade equipment and facilities.
+Added: Our business may also be impacted by government policies, such as tariffs, duties, subsidies, import and export restrictions and outright embargos.
+Added: We employ maintenance and operations personnel at each of our facilities, which are regulated by the Occupational Safety and Health Administration.
+Added: ethanol industry relies heavily on tank cars to deliver its product to market.
+Added: In 2015, the DOT finalized the Enhanced Tank Car Standard and Operational Controls for High-Hazard and Flammable Trains, or DOT specification 117, which established a schedule to retrofit or replace older tank cars that carry crude oil and ethanol, braking standards intended to reduce the severity of accidents and new operational protocols.
+Added: The rule has increased the lease costs for railcars in the short term and may increase the lease costs long term, which will in turn result in an increase in the fees our partnership charges for railcar capacity.
+Added: The deadline for compliance with DOT specification 117 is May 1, 2023.
+Added: As of March 31, 2023, our partnership's fleet was DOT 117 compliant.
+Added: Comparability
+Added: There are various events that could affect comparability of our operating results, including increased production rates from 2023 to 2022.
+Added: Segment Results
+Added: We report the financial and operating performance for the following three operating segments:
+Added: (1) ethanol production, which includes the production of ethanol, distillers grains, Ultra-High Protein and renewable 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, renewable corn oil, natural gas and other commodities, and (3) partnership, which includes fuel storage and transportation services.
During the normal course of business, our operating segments do business with each other.
−Removed: For example, our agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains and corn oil of our ethanol production segment.
+Added: For example, our agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains, Ultra-High Protein, and renewable corn oil of our ethanol production segment.
Our partnership segment provides fuel storage and transportation services for our agribusiness and energy services segment.
2 unchanged sentences
however, they do not impact our consolidated results since the revenues and corresponding costs are eliminated.
−Removed: 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 and the loss (gain) on sale of assets.
+Added: 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.
When we evaluate segment performance, we review the following segment information as well as earnings before interest, income taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA.
−Removed: Segment Results
−Removed: The selected operating segment financial information are as follows (in thousands):
+Added: The selected operating segment financial information is as follows (in thousands):
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
Ethanol production
13 unchanged sentences
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
Cost of goods sold
4 unchanged sentences
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
−Removed: Gross margin:
Ethanol production $ (21,453) $ (24,007) (10.6)%
4 unchanged sentences
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
Operating income (loss)
6 unchanged sentences
$ (56,540) $ (47,902) 18.0%
−Removed: $ (61,880) $ (44,675) 38.5% $ (75,941) $ 17,705 *
−Removed: (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.
−Removed: (2) Corporate activities for the three and nine months ended September 30, 2021, includes a $1.8 million loss on sale of assets and a $31.2 million gain on sale of assets, respectively.
+Added: (1) Operating loss for ethanol production includes an inventory lower of cost or net realizable value adjustment of $13.2 million for the three months ended March 31, 2022.
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
Depreciation and amortization
7 unchanged sentences
EBITDA is defined as earnings before interest expense, income tax expense, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs.
−Removed: Adjusted EBITDA includes adjustments related to gains or losses on sale of assets, other income associated with the USDA COVID-19 relief grant, and our proportional share of EBITDA adjustments of our equity method investees.
+Added: Adjusted EBITDA includes adjustments related to our proportional share of EBITDA adjustments of our equity method investees.
We believe EBITDA, adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies.
4 unchanged sentences
Three Months Ended
−Removed: September 30, Nine Months Ended
−Removed: September 30,
−Removed: 2022 2021 2022 2021
Net loss $ (66,249) $ (55,872) 18.6%
Interest expense 9,738 8,806 10.6
−Removed: 9,576 9,488 26,182 60,225
Income tax expense (benefit) 3,429 (1,153) *
2 unchanged sentences
EBITDA (27,696) (27,820) (0.4)
−Removed: Other income (3)
−Removed: — — (27,712) —
−Removed: Loss (gain) on sale of assets, net — 1,823 — (31,245)
Proportional share of EBITDA adjustments to equity method investees 45 45 —
Adjusted EBITDA $ (27,651) $ (27,775) (0.4)%
−Removed: (1) Interest expense for three and nine months ended September 30, 2022, includes a loss on settlement of convertible notes of $419 thousand, and for the nine months ended September 30, 2021, includes a loss upon extinguishment of convertible notes of $22.1 million and a loss on settlement of convertible notes of $9.5 million.
(1) Excludes amortization of operating lease right-of-use assets and amortization of debt issuance costs.
−Removed: (3) Other income for the nine months ended September 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.
The following table reconciles segment EBITDA to consolidated adjusted EBITDA (in thousands):
Three Months Ended
−Removed: September 30, %
−Removed: Variance Nine Months Ended
−Removed: September 30, %
−Removed: 2022 2021 2022 2021
Adjusted EBITDA
5 unchanged sentences
Corporate activities (15,119) (17,780) (15.0)
−Removed: (13,945) (14,129) (1.3) (47,553) (55) *
EBITDA (27,696) (27,820) (0.4)
−Removed: Other income (3)
−Removed: — — * (27,712) — *
−Removed: Loss (gain) on sale of assets, net — 1,823 * — (31,245) *
Proportional share of EBITDA adjustments to equity method investees 45 45 —
$ (27,651) $ (27,775) (0.4)%
−Removed: (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.
−Removed: (2) Includes corporate expenses, offset by a loss on sale of assets of $1.8 million and a $31.2 million gain on sale of assets for the three and nine months ended September 30, 2021, respectively.
−Removed: (3) Other income for the nine months ended September 30, 2022 includes a grant received from the USDA related to the Biofuel Producer Program of $27.7 million.
+Added: (1) Ethanol production includes an inventory lower of cost or net realizable value adjustment of $13.2 million for the three months ended March 31, 2022.
* Percentage variance not considered meaningful.
−Removed: Three Months Ended September 30, 2022 Compared with the Three Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2023 Compared with the Three Months Ended March 31, 2022
Consolidated Results
−Removed: Consolidated revenues increased $208.2 million for the three months ended September 30, 2022 compared with the same period in 2021 primarily due to higher average prices and higher volumes sold on ethanol, distillers grains, and corn oil.
−Removed: Net loss increased $13.5 million and adjusted EBITDA decreased $20.8 million for the three months ended September 30, 2022, compared with the same period last year primarily due to lower ethanol crush margins, offset by the $27.7 million USDA COVID-19 relief grant received, which is excluded from adjusted EBITDA, and also higher margins on agribusiness and energy services.
−Removed: Interest expense increased $0.1 million for the three months ended September 30, 2022, compared with the same period in 2021.
−Removed: Income tax benefit was $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 primarily due to a decrease in the valuation allowance recorded against deferred tax assets included in AOCI for the three months ended September 30, 2022.
−Removed: The following discussion provides greater detail about our third quarter segment performance.
+Added: Consolidated revenues increased $51.5 million for the three months ended March 31, 2023 compared with the same period in 2022 primarily due to higher volumes sold on ethanol, distillers grains including Ultra-High Protein, and renewable corn oil, as well as higher average selling prices on distillers grains including Ultra-High Protein, offset by lower average selling prices on ethanol and renewable corn oil within our ethanol production segment as described below.
+Added: Revenues were also slightly offset by lower revenues within our agribusiness and energy services segment as a result of decreased trading volumes and margins.
+Added: Net loss increased $10.4 million for the three months ended March 31, 2023 compared with the same period last year primarily due to lower agribusiness and energy services segment trading margins as well as higher depreciation expense.
+Added: Adjusted EBITDA increased $0.1 million for the three months ended March 31, 2023.
+Added: Interest expense increased $0.9 million for the three months ended March 31, 2023 compared with the same period in 2022 primarily due to higher interest rates on floating rate debt and reduced capitalized interest as certain projects have been completed.
+Added: Income tax expense was $3.4 million for the three months ended March 31, 2023, compared with income tax benefit of $1.2 million for the same period in 2022 primarily due to an increase in the valuation allowance recorded against certain deferred tax assets for the three months ended March 31, 2023.
+Added: The following discussion provides greater detail about our first quarter segment performance.
Ethanol Production Segment
1 unchanged sentence
Three Months Ended
−Removed: September 30,
2023 2022 % Variance
2 unchanged sentences
(thousands of equivalent dried tons) 482 504 (4.4)
−Removed: Corn oil sold
+Added: Ultra-High Protein sold
+Added: (thousands of tons) 52 12 333.3
+Added: Renewable corn oil sold
(thousands of pounds) 68,011 59,295 14.7
1 unchanged sentence
(thousands of bushels) 71,235 68,304 4.3%
−Removed: Revenues in our ethanol production segment increased $222.7 million for the three months ended September 30, 2022 compared with the same period in 2021, primarily due to higher ethanol, distillers grains and corn oil volumes sold resulting in increased revenues of $95.7 million, $16.5 million and $11.2 million, respectively, as well as higher weighted average selling prices on ethanol and distillers grains resulting in increased revenues of $60.4 million and $29.5 million, respectively.
+Added: Revenues in our ethanol production segment increased $57.9 million for the three months ended March 31, 2023 compared with the same period in 2022, primarily due to higher ethanol, distillers grains including Ultra-High Protein, and renewable corn oil volumes sold, resulting in increased revenues of $25.9 million, $3.6 million and $6.0 million, respectively, as well as higher weighted average selling prices on distillers grains including Ultra-High Protein, resulting in increased revenues of $27.1 million, offset by lower weighted average selling prices on ethanol and renewable corn oil resulting in decreased revenues of $3.0 million and $2.6 million, respectively.
Revenues also increased as a result of hedging activities by $3.8 million.
−Removed: Cost of goods sold in our ethanol production segment increased $246.0 million for the three months ended September 30, 2022 compared with the same period last year primarily due to higher corn volumes processed, higher weighted average corn prices and hedging activities, resulting in increased costs of $87.6 million, $60.6 million and $19.4 million, respectively, with the remainder of the increase primarily driven by higher utilities, freight and chemical costs.
−Removed: Operating loss in our ethanol production segment increased $19.9 million for the three months ended September 30, 2022 compared with the same period in 2021 primarily due to decreased margins as outlined above.
−Removed: Depreciation and amortization expense for the ethanol production segment was $21.6 million for the three months ended September 30, 2022, compared with $25.6 million for the same period last year.
+Added: Cost of goods sold in our ethanol production segment increased $55.4 million for the three months ended March 31, 2023 compared with the same period last year primarily due to higher weighted average corn prices and higher corn volumes processed, resulting in increased costs of $63.5 million and $17.9 million, respectively, offset by lower hedging activities resulting in decreased cost of goods sold of $59.3 million.
+Added: The remainder of the increase was primarily driven by higher utilities and freight of $21.1 million.
+Added: Operating loss in our ethanol production segment increased $2.2 million for the three months ended March 31, 2023 compared with the same period in 2022 primarily due to increased depreciation expense of $4.5 million as a result of completion of various projects, offset by increased margins as outlined above.
+Added: Depreciation and amortization expense for the ethanol production segment was $22.9 million for the three months ended March 31, 2023, compared with $18.4 million for the same period last year, with the increase primarily due to Ultra-High Protein assets placed in service.
Agribusiness and Energy Services Segment
−Removed: Revenues in our agribusiness and energy services segment decreased $13.0 million while operating income increased $2.0 million for the three months ended September 30, 2022, compared with the same period in 2021.
−Removed: The decrease in
−Removed: revenues was primarily due to a decrease in ethanol and corn oil trading volume.
−Removed: Operating income increased primarily as a result of higher trading margins.
+Added: Revenues in our agribusiness and energy services segment decreased $6.3 million while operating income also decreased $6.3 million for the three months ended March 31, 2023, compared with the same period in 2022.
+Added: The decrease in revenues was primarily due to a decrease in ethanol and renewable corn oil trading volumes as well as decreased trading margins for distillers grains.
+Added: Operating income decreased primarily as a result of lower trading margins driven by market volatility in our distillers grains flows and natural gas storage.
Partnership Segment
−Removed: Revenues generated by our partnership segment increased $0.8 million for the three months ended September 30, 2022 compared with the same period for 2021.
+Added: Revenues generated by our partnership segment increased $1.7 million for the three months ended March 31, 2023 compared with the same period for 2022.
Storage and throughput services revenue was consistent with the prior year.
−Removed: Railcar transportation services revenue increased $0.9 million primarily due to an increase in capacity provided.
−Removed: Terminal services revenue decreased $0.1 million due to slightly lower throughput volumes compared to the prior year.
−Removed: Trucking and other revenue was consistent with the prior year.
−Removed: Operating income decreased $0.4 million for the three months ended September 30, 2022 compared with the same period in 2021.
−Removed: Intersegment Eliminations
−Removed: Intersegment eliminations of revenues increased by $2.3 million for the three months ended September 30, 2022, compared with the same period in 2021 primarily due to increased intersegment marketing and services fees within the agribusiness and energy services segment as a result of higher production volumes as well as increased storage and throughput fees paid to the partnership segment.
−Removed: Corporate Activities
−Removed: Operating loss was impacted by an increase in corporate activities of $1.4 million for the three months ended September 30, 2022, compared to the same period in 2021, primarily due to increased personnel costs during the three months ended September 30, 2022.
−Removed: We 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.
−Removed: 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 included in AOCI.
−Removed: Nine Months Ended September 30, 2022 Compared with the Nine Months Ended September 30, 2021
−Removed: Consolidated Results
−Removed: Consolidated revenues increased $724.0 million for the nine months ended September 30, 2022, compared with the same period in 2021 primarily due to higher average prices and higher sales volumes on ethanol, distillers grains and corn oil.
−Removed: Net loss increased $30.8 million and adjusted EBITDA decreased $62.0 million for the nine months ended September 30, 2022 compared with the same period last year primarily due to decreased margins on ethanol production.
−Removed: Interest expense decreased $34.0 million for the nine months ended September 30, 2022 compared with the same period in 2021 primarily due to the loss upon extinguishment of convertible notes of $31.6 million for the nine months ended September 30, 2021.
−Removed: Income tax benefit was $0.1 million for the nine months ended September 30, 2022, compared with income tax benefit of $2.9 million for the same period in 2021 primarily due to a decrease in the valuation allowance recorded against increases in deferred tax assets included in AOCI for both the nine months ended September 30, 2022 and the nine months ended September 30, 2021.
−Removed: The following discussion provides greater detail about our year-to-date segment performance.
−Removed: Ethanol Production Segment
−Removed: Key operating data for our ethanol production segment is as follows:
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: 2022 2021 % Variance
−Removed: (thousands of gallons) 646,927 550,127 17.6%
−Removed: Distillers grains sold
−Removed: (thousands of equivalent dried tons) 1,695 1,459 16.2
−Removed: Corn oil sold
−Removed: (thousands of pounds) 204,502 156,835 30.4
−Removed: Corn consumed
−Removed: (thousands of bushels) 223,830 189,544 18.1%
−Removed: Revenues in our ethanol production segment increased $742.4 million for the nine months ended September 30, 2022 compared with the same period in 2021, primarily due to higher average selling prices on ethanol, distillers grains and corn oil resulting in increased revenues of $278.1 million, $59.1 million and $42.5 million, respectively, and higher ethanol, distillers grains and corn oil volumes sold resulting in increased revenues of $217.8 million, $45.3 million and $22.8 million, respectively.
−Removed: Revenues also increased as a result of hedging activities by $79.5 million .
−Removed: Cost of goods sold in our ethanol production segment increased $803.2 million for the nine months ended September 30, 2022 compared with the same period last year primarily due to higher weighted average corn prices, higher corn volumes processed and hedging activities, resulting in increased costs of $277.3 million, $206.4 million and $133.7 million, respectively, with the remainder of the increase primarily driven by higher utilities, freight and chemical costs .
−Removed: Operating loss increased $56.8 million for the nine months ended September 30, 2022 compared with the same period in 2021 primarily due to decreased margins on ethanol production as outlined above.
−Removed: Depreciation and amortization expense for the ethanol production segment was $59.1 million for the nine months ended September 30, 2022, compared with $62.7 million for the same period last year.
−Removed: Agribusiness and Energy Services Segment
−Removed: Revenues in our agribusiness and energy services segment decreased $14.2 million while operating income increased $10.2 million for the nine months ended September 30, 2022, compared with the same period in 2021.
−Removed: The decrease in revenues was primarily due to a decrease in ethanol and corn oil trading volume.
−Removed: Operating income increased primarily as a result of higher trading margins.
−Removed: Partnership Segment
−Removed: Revenues generated by our partnership segment decreased $0.5 million for the nine months ended September 30, 2022 compared with the same period for 2021.
−Removed: Storage and throughput services revenue decreased $0.7 million due to a reduction in the contracted minimum volume commitment as a result of the sale of the Ord ethanol plant in the first quarter of 2021.
−Removed: Railcar transportation services revenue increased $0.9 million primarily due to an increase in capacity provided and higher fees charged on the volumetric capacity.
−Removed: Terminal services revenue decreased $0.3 million due to lower minimum volume commitment fees earned.
−Removed: Trucking and other revenue decreased $0.4 million primarily as a result of lower non-affiliate freight volume.
−Removed: Operating income decreased $1.3 million for the nine months ended September 30, 2022, compared with the same period in 2021.
+Added: Railcar transportation services revenue increased $1.7 million primarily due to an increase in transportation service fees charged as a result of upgrading our leased railcar fleet to comply with government regulations and higher railcar volumetric capacity.
+Added: Terminal services revenue as well as trucking and other revenue were consistent with the prior year.
+Added: Operating income increased $0.1 million for the three months ended March 31, 2023 compared with the same period in 2022.
Intersegment Eliminations
−Removed: Intersegment eliminations of revenues increased by $3.7 million for the nine months ended September 30, 2022, compared with the same period in 2021 primarily due to increased intersegment marketing and service fees within the
−Removed: agribusiness and energy services segment as a result of higher production volumes.
+Added: Intersegment eliminations of revenues increased by $1.8 million for the three months ended March 31, 2023, compared with the same period in 2022 primarily due to increased railcar fees paid to the partnership segment.
Corporate Activities
−Removed: Operating loss was impacted by an increase in corporate activities of $50.7 million for the nine months ended September 30, 2022 compared to the same period in 2021, primarily due to the $31.2 million net gain on sale of assets recorded in the same period last year, as well as increased personnel costs, professional fees and memberships, and travel costs during the nine months ended September 30, 2022.
−Removed: We recorded income tax benefit of $0.1 million for the nine months ended September 30, 2022, compared with income tax benefit of $2.9 million for the same period in 2021 primarily due to a decrease in the valuation allowance recorded against deferred tax assets included in AOCI for both the nine months ended September 30, 2022 and the nine months ended September 30, 2021.
+Added: Corporate activities for the three months ended March 31, 2023 were consistent with the same period in 2022.
+Added: We recorded income tax expense of $3.4 million for the three months ended March 31, 2023, compared with income tax benefit of $1.2 million for the same period in 2022.
+Added: The increase in the amount of tax expense recorded for the three months ended March 31, 2023 was primarily due to an increase in the valuation allowance recorded against certain deferred tax assets.
Liquidity and Capital Resources
1 unchanged sentence
We fund our operating expenses and service debt primarily with operating cash flows.
−Removed: Capital resources for maintenance and growth expenditures are funded by a variety of sources, including cash generated from operating activities, borrowings under bank credit facilities, or the issuance of senior notes or equity.
−Removed: Our ability to access capital markets for debt financing under reasonable terms depends on numerous factors, including our past performance, current financial condition, credit risk profile and market conditions generally.
−Removed: We believe that our ability to obtain financing based on these factors remains sufficient and provides a solid foundation to meet our future liquidity and capital resource requirements.
−Removed: On September 30, 2022, we had $420.8 million in cash and equivalents, excluding restricted cash.
−Removed: Additionally, we had $66.6 million in restricted cash and $25.0 million in marketable securities at September 30, 2022.
−Removed: We also had $155.0 million available under our committed revolving credit agreement, subject to restrictions and other lending conditions.
+Added: Capital resources for maintenance and growth expenditures are funded by a variety of sources, including cash generated from operating activities, borrowings under bank credit facilities, or issuance of senior notes or equity.
+Added: Our ability to access capital markets for debt under reasonable terms depends on our financial condition, credit ratings and market conditions.
+Added: We believe that our ability to obtain financing at reasonable rates based on these factors remains sufficient and provides a solid foundation to meet our future liquidity and capital resource requirements.
+Added: On March 31, 2023, we had $354.2 million in cash and cash equivalents and $54.1 million in restricted cash.
+Added: We also had $159.0 million available under our committed revolving credit agreement, subject to restrictions or other lending conditions.
Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution.
−Removed: At September 30, 2022, our subsidiaries had approximately $115.4 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.
−Removed: Net cash used in operating activities was $34.5 million for the nine months ended September 30, 2022, compared with net cash used in operating activities of $27.9 million for the same period in 2021.
−Removed: Net cash used in operating activities compared to the prior ye ar were primarily affected by a higher net loss as well as increases in cash used related to derivative financial instruments, offset by decreases in cash used related to accounts receivable and a decrease related to the gain on sale of assets when compared to the same period of the prior year.
−Removed: Net cash used in investing activities was $90.3 million for the nine months ended September 30, 2022, compared with net cash used in investing activities of $43.5 million for the same period in 2021.
−Removed: Investing activities compared to the prior year were primarily affected by the increased purchases of fixed assets, offset by proceeds from the sale of marketable securities during the first quarter of 2022.
−Removed: Net cash provided by financing activities was $51.2 million for the nine months ended September 30, 2022, compared with net cash provided by financing activities of $517.4 million for the same period in 2021, primarily due to proceeds from the issuance of common stock and debt offerings and proceeds during the same period in 2021.
+Added: At March 31, 2023, our subsidiaries had approximately $118.7 million of net assets that were not available to use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.
+Added: Net cash used in operating activities was $117.0 million for the three months ended March 31, 2023, compared with net cash used in operating activities of $162.5 million for the same period in 2022.
+Added: Net cash used in operating activities compared to the prior ye ar were primarily affected by increases in cash used related to accounts payables, offset by decreases in cash used related to accounts receivable and inventories.
+Added: Net cash used in investing activities was $35.4 million for the three months ended March 31, 2023, compared with net cash provided by investing activities of $37.9 million for the same period in 2022.
+Added: Investing activities compared to the prior year were primarily affected by the proceeds from the sale of marketable securities during the first quarter of 2022, offset by increased cash provided by lower purchases of fixed assets compared to the same period in the prior year.
+Added: Net cash provided by financing activities was $60.5 million for the three months ended March 31, 2023, compared with net cash provided by financing activities of $167.9 million for the same period in 2022, primarily due to higher debt proceeds as a result of changes in our debt structure in the first quarter of 2022.
Additionally, Green Plains Finance Company, Green Plains Trade, Green Plains Grain and Green Plains Commodity Management use revolving credit facilities to finance working capital requirements.
We frequently draw from and repay these facilities, which results in significant cash movements reflected on a gross basis within financing activities as proceeds from and payments on short-term borrowings.
−Removed: We had capital expenditures of approximately $183.2 million during the nine months ended September 30, 2022, primarily for Ultra-High Protein expansion projects at various facilities and for various maintenance projects.
−Removed: Capital spending for the remainder of 2022 is expected to be between $70.0 million and $100.0 million for various projects, including the Ultra-High Protein expansion at our Obion, Central City and Mount Vernon locations, which are expected to be financed with cash on hand and by cash provided by operating activities.
−Removed: Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains, corn oil and natural gas.
+Added: We incurred capital expenditures of approximately $32.6 million during the three months ended March 31, 2023, primarily for Ultra-High Protein expansion projec ts at Mount Vernon and Obion, the clean sugar expansion project at Shenandoah and for various other capital projects.
+Added: Capital spending for the remainder of 2023 is expected to be between $120.0 million and $160.0 million, which is subject to review prior to the initiation of any project.
+Added: The estimate includes additional expenditures to deploy FQT's MSC TM and FQT's CST TM technology, as well as expenditures for various other capital projects, which are expected to be financed with cash on hand and by cash provided by operating activities.
+Added: Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains, Ultra-High Protein, renewable corn oil and natural gas.
We use derivative financial instruments to reduce the market risk associated with fluctuations in commodity prices.
−Removed: Sudden changes in commodity prices may require cash deposits with brokers for margin calls or significant liquidity with little advanced notice to meet margin calls, depending on our open derivative positions.
−Removed: continuously monitor our exposure to margin calls and believe we will continue to maintain adequate liquidity to cover margin calls from our operating results and borrowings.
−Removed: For each calendar quarter commencing with the quarter ended September 30, 2015, the partnership agreement requires the partnership to distribute all available cash, as defined, to its partners, including us, within 45 days after the end of each calendar quarter.
+Added: Sudden changes in commodity prices may require cash deposits with brokers for margin calls or significant liquidity with little advanced notice to meet margin calls, depending on our open derivative
+Added: We continuously monitor our exposure to margin calls and believe we will continue to maintain adequate liquidity to cover margin calls from our operating results and borrowings.
+Added: The partnership agreement requires the partnership to distribute all available cash, as defined, to its partners, including us, within 45 days after the end of each calendar quarter.
Available cash generally means all cash and cash equivalents on hand at the end of that quarter less cash reserves established by the general partner, including those for future capital expenditures, future acquisitions and anticipated future debt service requirements, plus all or any portion of the cash on hand resulting from working capital borrowings made subsequent to the end of that quarter.
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The program may be suspended, modified or discontinued at any time without prior notice.
−Removed: We did not repurchase any shares during the third quarter of 2022.
−Removed: To date, we have repurchased 7,396,936 of common stock for approximately $92.8 million under the program.
+Added: We did not repurchase any shares of common stock during the first quarter of 2023.
+Added: To date, we have repurchased 7.4 million shares of common stock for approximately $92.8 million under the program.
We believe we have sufficient working capital for our existing operations.
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For additional information related to our debt, see Note 7 – Debt included as part of the notes to consolidated financial statements and Note 12 – Debt included as part of the notes to consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2022.
−Removed: We were in compliance with our debt covenants at September 30, 2022.
+Added: We were in compliance with our debt covenants at March 31, 2023.
Based on our forecasts, we believe we will maintain compliance at each of our subsidiaries for the next twelve months or have sufficient liquidity available on a consolidated basis to resolve noncompliance.
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In the event a subsidiary is unable to comply with its debt covenants, the subsidiary’s lenders may determine that an event of default has occurred, and following notice, the lenders may terminate the commitment and declare the unpaid balance due and payable.
−Removed: As outlined in Note 8 - Debt , we use LIBOR as a reference rate for our Green Plain Partners term loan.
−Removed: The administrator of LIBOR ceased the publication of the one week and two month LIBOR settings immediately following the LIBOR publication on December 31, 2021, and the remaining USD LIBOR settings immediately following the LIBOR publication on June 30, 2023.
−Removed: Federal Reserve, in conjunction with the Alternative Reference Rate Committee, a steering committee comprised of large U.S.
−Removed: financial institutions, is considering replacing U.S.
−Removed: dollar LIBOR with a new reference rate, the SOFR, calculated using short-term repurchase agreements backed by Treasury securities.
−Removed: The potential effect of any such event on interest expense cannot yet be determined.
Corporate Activities
In March 2021, we issued $230.0 million of 2.25% convertible senior notes due in 2027, or the 2.25% notes.
−Removed: 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.
−Removed: 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 2.25% notes bear interest at a rate of 2.25% per year, payable on March 15 and September 15 of each year.
+Added: The initial conversion rate is 31.6206 shares of our common stock per $1,000 principal amount of 2.25% notes (equivalent to an initial conversion price of approximately $31.62 per share of our common stock), representing an approximately 37.5% premium over the offering price of our common stock.
The conversion rate is subject to adjustment upon the occurrence of certain events, including but not limited to;
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the issuance of additional rights, options and warrants;
−Removed: the event of a cash dividend or distribution;
or a tender or exchange offering.
−Removed: 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: In addition, we may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including our calling the 2.25% notes for redemption.
We may settle the 2.25% notes in cash, common stock or a combination of cash and common stock.
−Removed: At September 30, 2022, the outstanding principal balance on the 2.25% notes was $230.0 million.
+Added: At March 31, 2023, the outstanding principal balance on the 2.25% notes was $230.0 million.
In June 2019, we issued $115.0 million of 4.00% convertible senior notes due in 2024, or the 4.00% notes.
−Removed: The 4.00% notes were senior, unsecured obligations, with interest payable on January 1 and July 1 of each year, beginning January 1,
−Removed: 2020, at a rate of 4.00% per annum.
+Added: The 4.00% notes were senior, unsecured obligations, 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 initial conversion rate was 64.1540 shares of our common stock per $1,000 principal amount of the 4.00% notes, which is equivalent to an initial conversion price of approximately $15.59 per share of our common stock.
−Removed: The final conversion rate was increased to 66.4178 in connection with the company's calling the 4.00% notes for redemption on May 25, 2022.
−Removed: In May 2021, we entered into a privately negotiated agreement with certain noteholders of the company’s 4.00% notes.
−Removed: Under this agreement, 3,568,705 shares of our common stock were exchanged for $51.0 million in aggregate principal amount of the 4.00% notes.
+Added: During May 2021, the company entered into a privately negotiated agreement with certain noteholders of the company's 4.00% notes.
+Added: Under this agreement, 3.6 million shares of the company's common stock were exchanged for $51.0 million in aggregate principal amount of the 4.00% notes.
+Added: On May 25, 2022, we gave notice calling for the redemption of our outstanding 4.00% notes, totaling an aggregate principal amount of $64.0 million.
+Added: The final conversion rate was increased to 66.4178 shares of common stock per $1,000
+Added: of principal.
+Added: 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.
−Removed: On May 25, 2022, we gave notice calling for the redemption of all our outstanding 4.00% notes, totaling an aggregate principal amount of $64.0 million.
−Removed: The conversion rate was 66.4178 shares of common stock per $1,000 of principal.
−Removed: 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 and were retired effective July 8, 2022.
+Added: Pursuant to the guidance within ASC 470, Debt, we recorded the exchanges as a conversion.
+Added: The 4.00% notes were retired effective July 8, 2022.
In August 2016, we issued $170.0 million of 4.125% convertible senior notes due in 2022, or 4.125% notes, which were senior, unsecured obligations with interest payable on March 1 and September 1 of each year.
−Removed: The notes were convertible at the Holder’s option.
−Removed: 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.
−Removed: In March 2021, concurrent with the issuance of the 2.25% notes, we 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 due 2022, in privately negotiated transactions.
−Removed: 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.
−Removed: Additionally, on September 1, 2022, approximately $1.7 million aggregate principal amount were settled through a combination of $1.7 million in cash and approximately 15 thousand shares of the company's common stock.
−Removed: 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.
−Removed: Additionally, on September 1, 2022, the remaining $23 thousand aggregate principal amount and accrued interest were settled in cash.
−Removed: The 4.125% notes were retired effective September 1, 2022.
+Added: Prior to March 1, 2022, the 4.125% notes were not convertible unless certain conditions were satisfied.
+Added: The initial conversion rate was 35.7143 shares of common stock per $1,000 of principal, which was equal to a conversion price of approximately $28.00 per share.
+Added: In March 2021, concurrent with the issuance of the 2.25% notes, we used approximately $156.5 million of the net proceeds of the 2.25% notes to repurchase approximately $135.7 million aggregate principal amount of its 4.125% notes due 2022, in privately negotiated transactions.
+Added: During August 2022, we 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 our common stock.
+Added: 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 our common stock, and the remaining $23 thousand aggregate principal amount and accrued interest were settled in cash.
+Added: The 4.125% notes were fully retired effective September 1, 2022.
+Added: 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 BlackRock.
+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: At March 31, 2023, the outstanding principal balance was $125.0 million on the loan and the interest rate was 11.75%.
+Added: Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of us, have a $75.0 million loan agreement, which matures on September 1, 2035.
+Added: At March 31, 2023, the outstanding principal balance was $74.3 million on the loan and the interest rate was 6.52%.
+Added: We also have small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.
Agribusiness and Energy Services Segment
−Removed: Green Plains Finance Company, Green Plains Grain and Green Plains Trade have total revolving commitments of $350.0 million and an accordion feature whereby amounts available under the Facility may be increased by up to $100.0 million of new lender commitments subject to certain conditions.
+Added: Green Plains Finance Company, Green Plains Grain and Green Plains Trade have total revolving commitments of $350.0 million and an accordion feature whereby amounts available under the Facility may be increased by up to $100.0 million of new lender commitments subject to certain conditions, due 2027.
Each SOFR rate loan shall bear interest for each day at a rate per annum equal to the Term SOFR rate for the outstanding period plus a Term SOFR adjustment and an applicable margin of 2.25% to 2.50%, which is dependent on undrawn availability under the Facility.
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The unused portion of the Facility is also subject to a commitment fee of 0.275% to 0.375%, dependent on undrawn availability.
−Removed: At September 30, 2022, the outstanding principal balance was $195.0 million on the facility and the interest rate was 6.11%.
−Removed: 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.
+Added: At March 31, 2023, the outstanding principal balance was $191.0 million on the facility and the interest rate was 7.64%.
+Added: Green Plains Commodity Management has an uncommitted $40.0 million revolving credit facility to finance margins related to its hedging programs.
+Added: During the three months ended March 31, 2023, this revolving credit facility was extended five years to mature on April 30, 2028.
Advances are subject to variable interest rates equal to SOFR plus 1.75%.
−Removed: At September 30, 2022, the outstanding principal balance was $11.1 million on the facility and the interest rate was 4.73%.
+Added: At March 31, 2023, the outstanding principal balance was $21.7 million on the facility and the interest rate was 6.57%.
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.
−Removed: The agreement is subject to negotiated variable interest rates.
−Removed: The company had no outstanding short-term notes payable related to the inventory financing agreement as of September 30, 2022.
−Removed: Ethanol Production Segment
−Removed: 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 with BlackRock for the purchase of all notes issued.
−Removed: At September 30, 2022, the outstanding principal balance was $125.0 million on the loan and the interest rate was 11.75%.
−Removed: Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of the company, have a $75.0 million delayed draw loan agreement, which matures on September 1, 2035.
−Removed: At September 30, 2022, the outstanding principal balance was $75.0 million on the loan and the interest rate was 5.02%.
−Removed: We also have small equipment financing loans, finance leases on equipment or facilities, and other forms of debt financing.
+Added: This agreement is subject to negotiated variable interest rates.
+Added: The company had no outstanding short-term notes payable related to the inventory financing agreement as of March 31, 2023.
Partnership Segment
−Removed: On July 20, 2021, the partnership entered into an Amended and Restated Credit Agreement (“Amended Credit Agreement”) with funds and accounts managed by BlackRock and TMI Trust Company as administrative agent creating a $60.0 million term loan to fund working capital, capital expenditures and other general partnership purposes.
−Removed: The amended term loan matures July 20, 2026.
−Removed: The amended term loan does not require any principal payments;
−Removed: however, the partnership has the option to prepay $1.5 million per quarter beginning twelve months after the closing date.
−Removed: Under the terms of the Amended Credit Agreement, BlackRock purchased the outstanding balance of the existing notes from the previous lenders.
−Removed: Interest on the term loan is based on 3-month LIBOR plus 8.00%, with a 0% LIBOR floor and is payable on the 15 th day of each March, June, September and December, during the term, with the first interest payment being September 15, 2021.
−Removed: On February 11, 2022, the amended term loan was modified to allow Green Plains Partners and its affiliates to repurchase outstanding notes.
−Removed: On the same day, the partnership purchased $1.0 million of the outstanding notes from accounts and funds managed by BlackRock and subsequently retired the notes.
−Removed: As of September 30, 2022, the term loan had a balance of $59.0 million and an interest rate of 11.19%.
+Added: Green Plains Partners, through a wholly owned subsidiary, has a term loan to fund working capital, capital expenditures and other general partnership purposes.
+Added: The term loan has a maturity date of July 20, 2026.
+Added: The term loan does not require any principal payments;
+Added: however, the partnership has the option to prepay $1.5 million per quarter.
+Added: Interest on the term loan is based on 3-month LIBOR plus 8.00%, with a 0% LIBOR floor and is payable on the 15 th day of each March, June, September and December, during the term.
+Added: The term loan is secured by substantially all of the assets of the partnership.
+Added: On February 11, 2022, the term loan was modified to allow Green Plains Partners and its affiliates to repurchase outstanding notes.
+Added: On the same day, the partnership purchased $1.0 million of the outstanding notes from the lenders and subsequently retired the notes.
+Added: As of March 31, 2023, the term loan had a balance of $59.0 million and an interest rate of 13.14%.
+Added: On April 19, 2023, the term loan was amended to change the underlying floating interest rate to the three-month term SOFR rate plus a 0.26161% credit spread adjustment from three-month LIBOR, with a 0% floor.
+Added: The impact of the amendment is not material to interest expense.
+Added: Effects of Inflation
+Added: We have experienced inflationary impacts on labor costs, wages, components, equipment, other inputs and services across our business and inflation and its impact could escalate in future quarters, many of which are beyond our control.
+Added: Moreover, we have fixed price arrangements with our customers and are not able to pass those costs along in most instances.
+Added: As such, inflationary pressures could have a material adverse effect on our performance and financial statements.
Contractual Obligations and Commitments
In addition to debt, our material future obligations include certain lease agreements and contractual and purchase commitments related to commodities, storage and transportation.
−Removed: Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of September 30, 2022 totaled $75.1 million.
−Removed: As of September 30, 2022, we had contracted future purchases of 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.
+Added: Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of March 31, 2023 totaled $99.0 million.
+Added: As of March 31, 2023, we had contracted future purchases of grain, ethanol, distillers grains, natural gas, and renewable corn oil valued at approximately $364.2 million and future commitments for storage and transportation valued at approximately $24.8 million.
Refer to Note 12 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.
Critical Accounting Policies and Estimates
−Removed: Critical accounting policies, including 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.
+Added: Critical accounting policies, including those relating to derivative financial instruments, accounting for income taxes, and impairment of goodwill, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.
Information about our critical accounting policies and estimates are included in our annual report on Form 10-K for the year ended December 31, 2022.
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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.