What changed in this filing

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Item 1. Financial Statements

2023-10-31 compared with 2023-08-04 · 208 added, 120 removed, 839 unchanged (28% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

2023 December 31,

46 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

4 unchanged sentences

Selling, general and administrative expenses 35,340 29,066 100,510 90,042

Gain on sale of assets ( 5,651 ) — ( 5,651 ) —

Depreciation and amortization expenses 23,899 24,647 73,911 66,013

7 unchanged sentences

Income (loss) before income taxes and income (loss) from equity method investees 18,373 ( 69,875 ) ( 94,162 ) ( 71,089 )

Income tax benefit (expense) 1,019 ( 2,895 ) ( 2,410 ) ( 1,742 )

Income tax benefit 7,763 1,888 5,353 146

Income (loss) from equity method investees 156 84 532 ( 112 )

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

1 unchanged sentence

Other comprehensive income, net of tax

Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of ($ 222 ), $ 3,579 , $ 3,801 and $ 1,658 , respectively

Unrealized gains on derivatives arising during the period, net of tax expense of ($ 4,547 ), ($ 2,494 ), ($ 746 ) and ($ 836 ), respectively

14,469 7,740 2,391 2,591

1 unchanged sentence

10,767 ( 1,662 ) 16,070 ( 1,112 )

Total other comprehensive income (loss), net of tax 4,312 ( 8,020 ) ( 6,775 ) ( 4,599 )

Total other comprehensive income, net of tax 25,236 6,078 18,461 1,479

Comprehensive income (loss) 51,528 ( 61,825 ) ( 69,816 ) ( 69,576 )

5 unchanged sentences

(unaudited and in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

3 unchanged sentences

Amortization of debt issuance costs and non-cash interest expense 2,172 3,214

Gain on sale of assets ( 5,651 ) —

Inventory lower of cost or net realizable value adjustment 1,663 11,177

Loss on extinguishment of debt — 419

Deferred income taxes ( 5,799 ) ( 477 )

2 unchanged sentences

Other 1,374 1,212

Changes in operating assets and liabilities

Changes in operating assets and liabilities before effects of asset disposition

Accounts receivable ( 34,180 ) ( 1,063 )

8 unchanged sentences

Purchases of property and equipment, net ( 77,876 ) ( 183,225 )

Proceeds from the sale of assets 25,106 —

Proceeds from the sale of marketable securities — 99,917

6 unchanged sentences

Payments on short-term borrowings ( 1,006,163 ) ( 1,616,226 )

Payments on extinguishment of convertible debt — ( 1,766 )

Payments of dividends and distributions ( 17,465 ) ( 16,498 )

2 unchanged sentences

Other financing activities — ( 1,424 )

Net cash provided by financing activities 85,539 160,303

Net cash provided by (used in) financing activities ( 9,661 ) 51,239

Net change in cash and cash equivalents, and restricted cash ( 134,116 ) ( 73,511 )

6 unchanged sentences

Continued from the previous page

Six Months Ended

Nine Months Ended

September 30,

Reconciliation of total cash and cash equivalents, and restricted cash

2 unchanged sentences

Total cash and cash equivalents, and restricted cash $ 366,160 $ 487,448

Non-cash financing activities

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

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

Supplemental investing activities

Assets disposed of in sale $ 22,314 $ —

liabilities relinquished (3,984) —

Net assets disposed $ 18,330 $ —

Supplemental disclosures of cash flow

11 unchanged sentences

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

As of June 30, 2023, the company owns a 48.8 % limited partner interest and a 2.0 % general partner interest in Green Plains Partners LP.

As of September 30, 2023, the company owns a 48.8 % limited partner interest and a 2.0 % general partner interest in Green Plains Partners LP.

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

4 unchanged sentences

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

The partnership’s consolidated total assets as of June 30, 2023 and December 31, 2022, excluding intercompany balances, are $ 113.4 million and $ 108.7 million, respectively, and primarily consist of cash and cash equivalents, property and equipment, operating lease right-of-use assets and goodwill.

The partnership’s consolidated total liabilities as of June 30, 2023 and December 31, 2022, excluding intercompany balances, are $ 128.5 million and $ 119.5 million, respectively, which primarily consist of long-term debt as discussed in Note 7 – Debt and operating lease liabilities.

The partnership’s consolidated total assets as of September 30, 2023 and December 31, 2022, excluding intercompany balances, are $ 108.8 million and $ 108.7 million, respectively, and primarily consist of cash and cash equivalents, property and equipment, operating lease right-of-use assets and goodwill.

The partnership’s consolidated total liabilities as of September 30, 2023 and December 31, 2022, excluding intercompany balances, are $ 121.0 million and $ 119.5 million, respectively, which primarily consist of long-term debt as discussed in Note 8 – Debt and operating lease liabilities.

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

On May 3, 2023, the company submitted a non-binding, preliminary proposal to the Board of Directors of Green Plains Holdings LLC, the general partner of Green Plains Partners LP, to acquire all of the publicly held common units of the partnership not already owned by the company.

The conflicts committee of the Board of Directors of the general partner (the "Conflicts Committee") has been delegated the authority to evaluate and negotiate, the possible terms of a proposed transaction.

Any transaction involving the company and the partnership is subject to the execution of a mutually satisfactory definitive agreement and approval of such definitive agreement and the transactions contemplated by the boards of directors of the company and the general partner, the Conflicts Committee, as well as the majority of the partnership's unitholders.

There can be no assurance that the parties will reach an agreement on the terms of a transaction, that a definitive agreement will be executed or that a transaction will be approved or consummated.

On September 16, 2023, a definitive agreement and plan of merger was entered into by and among the company, GPLP Holdings Inc., a wholly owned subsidiary of the company, GPLP Merger Sub LLC, a wholly owned subsidiary of GPLP Holdings Inc., the partnership, and Green Plains Holdings LLC.

Refer to Note 3 - Merger and Disposition included herein for more information.

The company also owns a majority interest in FQT, with their results being consolidated in our consolidated financial statements.

7 unchanged sentences

The company bases its estimates on historical experience and assumptions it believes are proper and reasonable under the circumstances and regularly evaluates the appropriateness of its estimates and assumptions.

Actual results could differ from those estimates.

results could differ from those estimates.

Certain accounting policies, including but not limited to those relating to impairment of 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.

73 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Ethanol Production Agribusiness & Energy

17 unchanged sentences

Total Revenues $ 773,367 $ 125,081 $ 20,145 $ ( 25,823 ) $ 892,770

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Ethanol Production Agribusiness & Energy

17 unchanged sentences

Total Revenues $ 2,195,600 $ 403,290 $ 61,443 $ ( 76,982 ) $ 2,583,351

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Ethanol Production Agribusiness & Energy

17 unchanged sentences

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Ethanol Production Agribusiness & Energy

20 unchanged sentences

Major Customers

Revenues from Customer A represented 15 % and 14 % of total revenues for the three and six months ended June 30, 2023, respectively, and revenues from Customer B represented 11 % of total revenues for the three months ended June 30, 2023, recorded within the ethanol production segment.

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

Revenues from Customer A represented 14 % of total revenues for both the three and nine months ended September 30, 2023, recorded within the ethanol production segment.

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

MERGER AND DISPOSITION

Green Plains Partners Definitive Merger Agreement

On September 16, 2023, the company, GPLP Holdings Inc.

(“Holdings”), GPLP Merger Sub LLC (“Merger Sub”), the partnership, and Green Plains Holdings LLC, the general partner of the partnership (the “General Partner”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into the partnership, with the partnership surviving as an indirect, wholly owned subsidiary of the company (the “Merger”).

Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding common unit representing a limited partner interest in the partnership (each, a “Partnership Common Unit”) other than partnership common units owned by the company, the General Partner and their respective affiliates (each, a “Public Common Unit”) will be converted into the right to receive, subject to adjustment as described in the Merger Agreement, (i) 0.405 shares of common stock, par value $ 0.001 per share, of the company (the “Company Common Stock” and the shares of the company common stock to be issued in the Merger, the “Stock Consideration”) and (ii) an amount of cash equal to the sum of (a) $ 2.00 plus (b) the product of (x) $ 0.455 divided by 90 , multiplied by (y) the number of days from, but excluding, the last day of the calendar quarter with respect to which the General Partner has declared a quarterly cash distribution to the holders of partnership common units of no less than $ 0.455 per Partnership Common Unit with a record date prior to the date of the closing of the Merger (the “Closing Date”), to, but excluding, the Closing Date, computed on the basis of a 360-day year comprised of twelve 30-day months and the actual number of days for any period less than a calendar month, and rounded to the nearest whole cent, without interest (the “Cash Consideration” and, together with the Stock Consideration, the “Merger Consideration”).

In addition, at the Effective Time, each of the outstanding awards relating to a Partnership Common Unit issued under a partnership long-term incentive plan (as defined in the Merger Agreement) will become fully vested and will be automatically canceled and converted into the right to receive,

with respect to each Partnership Common Unit subject thereto, the Merger Consideration (plus any accrued but unpaid amounts in relation to distribution equivalent rights).

Except for the incentive distribution rights representing limited partner interests in the partnership, which will be automatically canceled immediately prior to the Effective Time for no consideration in accordance with the First Amended and Restated Agreement of Limited Partnership of the partnership, dated as of July 1, 2015 (as amended, the “Partnership Agreement”), the limited partner interests in the partnership owned by the company, the General Partner and their respective affiliates prior to the Effective Time will remain outstanding as limited partner interests in the surviving entity.

The economic general partner interest in the partnership will remain outstanding as a general partner interest in the surviving entity immediately following the Effective Time, and the General Partner will continue as the sole general partner of the surviving entity.

The Conflicts Committee (the "Conflicts Committee") of the board of directors of the General Partner has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the partnership, including the holders of public common units, (ii) approved the Transaction Documents related to the Merger (the "Transaction Documents") and the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth in the Transaction Documents (the foregoing constituting “Special Approval” as defined in the Partnership Agreement) and (iii) recommended to the board of directors of the General Partner the approval by the board of directors of the General Partner of the Transaction Documents and the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby, including the Merger.

The board of directors of the General Partner (acting, in part, based upon the recommendation of the Conflicts Committee) has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the partnership, including the holders of Public Common Units, (ii) approved the Transaction Documents and the transactions contemplated thereby, including the Merger, (iii) authorized the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby, including the Merger, on the terms and subject to the conditions set forth in the Transaction Documents and (iv) directed that the Merger Agreement and the Merger be submitted to a vote of the limited partners of the partnership (the “Limited Partners”) for approval pursuant to Section 14.3 of the Partnership Agreement and authorized the limited partners to act by written consent pursuant to Section 13.11 of the partnership agreement.

The board of directors of the company (the “Company Board”) has (i) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger and the issuance of the company Common Stock as part of the Merger Consideration (the “Company Stock Issuance”), are in the best interests of the company and its shareholders and (ii) approved and authorized the execution and delivery of the Transaction Documents and the consummation of the transactions contemplated thereby, including the Merger and the company stock issuance, on the terms and subject to the conditions set forth in the Transaction Documents.

The Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants applicable to such party, including, among others, covenants relating to (i) the company’s and the partnership’s conduct of business during the interim period between the execution of the Merger Agreement and the Effective Time and (ii) the obligation to use reasonable best efforts to cause the Merger to be consummated.

Completion of the Merger is subject to certain customary conditions, including, among others:

(i) the receipt of the written consent as contemplated by the Merger Agreement;

(ii) there being no law or injunction prohibiting consummation of the transactions contemplated under the Merger Agreement;

(iii) the effectiveness of a registration statement on Form S-4 relating to the shares of the company Common Stock to be issued as the Stock Consideration (the “Registration Statement”);

(iv) approval for listing on The Nasdaq Stock Market LLC of the shares of the company common stock to be issued as the Stock Consideration;

(v) subject to specified materiality standards, the accuracy of certain representations and warranties of each party;

and (vi) compliance by each party in all material respects with its covenants.

The Merger Agreement provides for certain termination rights for both the company and the partnership, including in the event that (i) the parties agree by mutual written consent (duly authorized by the Conflicts Committee and the Company Board) to terminate the Merger Agreement, (ii) the Merger is not consummated by March 16, 2024, (iii) a law or injunction prohibiting the consummation of the transactions contemplated by the Merger Agreement is in effect and has become final and non-appealable, or (iv) the other party is in material breach of the Merger Agreement.

The Merger Agreement provides that upon termination of the Merger Agreement under certain circumstances, (i) the company will be obligated to reimburse the partnership for its out-of-pocket fees and expenses and (ii) the partnership will be obligated to reimburse the company for its out-of-pocket fees and expenses, in each case, in an amount not to exceed $5 million.

Disposition of Green Plains Atkinson LLC

On September 7, 2023, the company completed the sale of the plant located in Atkinson, Nebraska and certain related assets and transfer of liabilities ("the Atkinson Transaction") for a sale price of $ 22.9 million, plus working capital of $ 1.0 million.

Correspondingly, the company entered into a separate asset purchase agreement with the partnership for $ 2.1 million to acquire the storage assets and the associated railcar operating leases.

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

The company recorded a pretax gain on the sale of the Atkinson plant of $ 4.6 million recorded within corporate activities.

The assets sold and liabilities transferred of the Atkinson plant at closing on September 7, 2023 were as follows (in thousands):

Amounts of Identifiable Assets Disposed and Liabilities Relinquished

Inventories $ 3,226

Prepaid expenses and other 308

Property, plant and equipment 15,199

Operating lease right-of-use assets 3,428

Accrued and other liabilities ( 367 )

Operating lease current liabilities ( 1,332 )

Operating lease long-term liabilities ( 2,096 )

Other liabilities ( 189 )

Total identifiable net assets disposed $ 18,177

The amounts reflected above represent working capital estimates, which are considered preliminary until contractual post-closing working capital adjustments are finalized, which had not yet occurred as of September 30, 2023.

FAIR VALUE DISCLOSURES

10 unchanged sentences

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

Fair Value Measurements at June 30, 2023

Fair Value Measurements at September 30, 2023

Quoted Prices in

39 unchanged sentences

Total liabilities measured at fair value $ — $ 85,160 $ 85,160

(1) Accounts payable is generally stated at historical amounts with the exception of $ 8.8 million and $ 31.9 million at June 30, 2023 and December 31, 2022, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices.

(1) Accounts payable is generally stated at historical amounts with the exception of $ 20.1 million and $ 31.9 million at September 30, 2023 and December 31, 2022, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices.

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

(2) As of June 30, 2023 and December 31, 2022, respectively, accrued and other liabilities includes $ 4.0 million and $ 1.9 million and other liabilities includes $ 5.2 million and $ 6.6 million of consideration related to potential earn-out payments recorded at fair value.

As of June 30, 2023, the fair value of the company’s debt was approximately $ 772.3 million compared with a book value of $ 742.5 million.

At December 31, 2022, the fair value of the company’s debt was approximately $ 654.5 million compared with a book value of $ 634.8 million.

(2) As of September 30, 2023 and December 31, 2022, respectively, accrued and other liabilities includes $ 6.3 million and $ 1.9 million and other liabilities includes $ 3.2 million and $ 6.6 million of consideration related to potential earn-out payments recorded at fair value.

As of September 30, 2023, the fair value of the company’s debt was approximately $ 663.5 million compared with a book value of $ 653.6 million.

At December 31, 2022, the fair value of the company’s debt was approximately $ 654.5

million compared with a book value of $ 634.8 million.

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

The company believes the fair value of its accounts receivable approximated book value, which was $ 132.3 million and $ 108.6 million at June 30, 2023 and December 31, 2022, respectively.

The company believes the fair value of its accounts receivable approximated book value, which was $ 142.8 million and $ 108.6 million at September 30, 2023 and December 31, 2022, respectively.

Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible assets and goodwill acquired represent Level 3 measurements which were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued.

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

( 14,070 ) ( 15,999 ) ( 52,300 ) ( 51,748 )

(1) Operating loss for ethanol production includes an inventory lower of cost or net realizable value adjustment of $ 9.5 million for the three and six months ended June 30, 2023.

$ 21,174 $ ( 61,880 ) $ ( 77,846 ) $ ( 75,941 )

(1) Operating income (loss) for ethanol production includes an inventory lower of cost or net realizable value adjustment of $ 1.7 million for the three and nine months ended September 30, 2023, and $11.2 million for the three and nine months ended September 30, 2022.

(2) Corporate activities for the three and nine months ended September 30, 2023 includes the $5.7 million pretax gain on sale of assets.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

6 unchanged sentences

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

September 30,

2023 December 31,

8 unchanged sentences

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

The company recorded a $ 9.5 million and $ 12.3 million lower of cost or net realizable value inventory adjustment associated with finished goods in cost of goods sold within the ethanol production segment as of June 30, 2023 and December 31, 2022, respectively.

The company recorded a $ 1.7 million and $ 12.3 million lower of cost or net realizable value inventory adjustment associated with finished goods in cost of goods sold within the ethanol production segment as of September 30, 2023 and December 31, 2022, respectively.

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

September 30,

2023 December 31,

6 unchanged sentences

DERIVATIVE FINANCIAL INSTRUMENTS

At June 30, 2023, the company’s consolidated balance sheet reflected unrealized losses of $ 33.4 million, net of tax, in accumulated other comprehensive loss.

At September 30, 2023, the company’s consolidated balance sheet reflected unrealized losses of $ 8.1 million, net of tax, in accumulated other comprehensive loss.

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

4 unchanged sentences

Fair Value Liability Derivatives'

September 30,

2023 December 31,

2022 June 30,

2022 September 30,

2023 December 31,

3 unchanged sentences

Total $ 14,038 $ 16,421 $ 21,811 $ 44,686

(1) At June 30, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $ 29.1 million, which included $ 1.3 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(1) At September 30, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $ 2.2 million, which included $ 0.1 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(2) At December 31, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $ 3.4 million, which included $ 9.0 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, partially offset by $ 2.0 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, and the balance representing economic hedges.

(3) At June 30, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange-traded futures and options contracts of $ 15.5 million, which included $ 12.8 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, $ 0.9 million of unrealized losses on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(3) At September 30, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange-traded futures and options contracts of $ 0.3 million, which included $ 5.1 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments, $ 0.2 million of net unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(4) At December 31, 2022, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange-traded futures and options contracts of $ 3.3 million, which included $ 0.6 million of net unrealized losses on derivative financial instruments designated as fair value hedging instruments and the balance representing economic hedges.

5 unchanged sentences

Comprehensive Income into Income Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

1 unchanged sentence

Cost of goods sold ( 13,234 ) ( 4,760 ) ( 18,688 ) ( 3,748 )

Net loss recognized in loss before income taxes $ ( 4,736 ) $ ( 3,393 ) $ ( 6,972 ) $ ( 727 )

Net gain (loss) recognized in income (loss) before income taxes $ ( 14,151 ) $ 2,198 $ ( 21,123 ) $ 1,471

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

1 unchanged sentence

Derivatives Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

9 unchanged sentences

on Derivatives Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Forwards Cost of goods sold 23,347 16,231 ( 8,940 ) ( 2,066 )

Net loss recognized in loss before income taxes $ ( 6,648 ) $ ( 509 ) $ ( 5,073 ) $ ( 54,269 )

Net gain (loss) recognized in income (loss) before income taxes $ 27,247 $ ( 697 ) $ 22,174 $ ( 54,966 )

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

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

1 unchanged sentence

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

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

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

Revenue Cost of

8 unchanged sentences

Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded $ ( 917 ) $ ( 13,221 ) $ 6,958 $ ( 7,366 )

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

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

Revenue Cost of

8 unchanged sentences

Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded $ ( 2,435 ) $ ( 17,171 ) $ 5,219 $ ( 1,229 )

The notional volume of open commodity derivative positions as of June 30, 2023, are as follows (in thousands):

The notional volume of open commodity derivative positions as of September 30, 2023, are as follows (in thousands):

Exchange-Traded (1)

5 unchanged sentences

Futures ( 420 ) (4)

Futures ( 1,115 ) (4)

Futures ( 5,880 ) Gallons Ethanol

Futures ( 60,900 ) (3)

Gallons Ethanol

Futures ( 1,315 ) MmBTU Natural Gas

1 unchanged sentence

MmBTU Natural Gas

Futures ( 5,895 ) (4)

MmBTU Natural Gas

Options ( 1,283 ) Bushels Corn

Options 2,339 Gallons Ethanol

Options 1 Tons Soybean Meal

Options 10,079 Pounds Soybean Oil

Options 1,839 MmBTU Natural Gas

10 unchanged sentences

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

Included in revenues are net gains of $ 0.4 million and $ 4.2 million for the three and six months ended June 30, 2023, respectively, and net gains of $ 0.4 million and $ 1.2 million for the three and six months ended June 30, 2022, respectively, on energy trading contracts.

Included in revenues are net losses of $ 0.1 million and net gains of $ 4.1 million for the three and nine months ended September 30, 2023, respectively, and net losses of $ 0.1 million and net gains of $ 1.2 million for the three and nine months ended September 30, 2022, respectively, on energy trading contracts.

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

September 30,

2023 December 31,

15 unchanged sentences

Total long-term debt $ 491,945 $ 495,243

(1) Includes $ 4.6 million and $ 5.2 million of unamortized debt issuance costs as of June 30, 2023 and December 31, 2022, respectively.

(2) Includes $ 0.6 million and $ 0.7 million of unamortized debt issuance costs as of June 30, 2023 and December 31, 2022, respectively.

(3) Includes $ 0.3 million of unamortized debt issuance costs as of both June 30, 2023 and December 31, 2022.

(4) Includes $ 0.4 million of unamortized debt issuance costs as of both June 30, 2023 and December 31, 2022.

(1) Includes $ 4.3 million and $ 5.2 million of unamortized debt issuance costs as of September 30, 2023 and December 31, 2022, respectively.

(2) Includes $ 0.5 million and $ 0.7 million of unamortized debt issuance costs as of September 30, 2023 and December 31, 2022, respectively.

(3) Includes $ 0.3 million of unamortized debt issuance costs as of both September 30, 2023 and December 31, 2022.

(4) Includes $0.3 million and $ 0.4 million of unamortized debt issuance costs as of September 30, 2023 and December 31, 2022, respectively.

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

September 30,

2023 December 31,

5 unchanged sentences

$ 159,747 $ 137,678

$ 247,112 $ 137,678

Corporate Activities

11 unchanged sentences

On and after March 15, 2024, and prior to the maturity date, the company may redeem, for cash, all, but not less than all, of the 2.25 % notes if the last reported sale price of the company’s common stock equals or exceeds 140 % of the applicable conversion price on (i) at least 20 trading days during a 30 consecutive trading day period ending on the trading day immediately prior to the date the company delivers notice of the redemption;

and (ii) the trading day immediately before the date of the redemption notice.

and (ii) the trading day immediately

before the date of the redemption notice.

The redemption price will equal 100 % of the principal amount of the 2.25 % notes to be redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date.

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

Under this agreement, 3.6 million shares of the company’s common stock were exchanged for $ 51.0 million in aggregate principal amount of the 4.00 % notes.

Under this agreement, approximately 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.

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

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

However, subject to the satisfaction of certain conditions, the Green Plains SPE LLC may elect to pay an amount in cash equal to interest accruing at a rate of 6.00 % per annum plus an

amount equal to interest accruing at a rate of 6.75 % per annum to be paid in kind.

However, subject to the satisfaction of certain conditions, the Green Plains SPE LLC may elect to pay an amount in cash equal to interest accruing at a rate of 6.00 % per annum plus an amount equal to interest accruing at a rate of 6.75 % per annum to be paid in kind.

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

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The Junior Notes can be retired or refinanced after 42 months with no prepayment premium.

The Junior Notes have an unsecured parent guarantee from the company and have certain limitations on distributions, dividends or loans to the company unless there will not exist any event of default.

At June 30, 2023, the interest rate on the Junior Notes was 11.75 %.

The Junior Notes have an unsecured

parent guarantee from the company and have certain limitations on distributions, dividends or loans to the company unless there will not exist any event of default.

At September 30, 2023, the interest rate on the Junior Notes was 11.75 %.

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

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

The proceeds from the loan were used to add MSC TM technology at the Wood River and Shenandoah facilities as well as other capital expenditures.

The proceeds from the loan were used to add MSC™ technology at the Wood River and Shenandoah facilities as well as other capital expenditures.

The loan bears interest at a fixed rate of 5.02 %, plus an interest rate premium of 1.5 % until the loan is fully drawn.

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

At June 30, 2023, the interest rate on the loan was 6.52 %.

At September 30, 2023, the interest rate on the loan was 6.52 %.

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

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

At June 30, 2023, the interest rate on the Facility was 8.48 %.

At September 30, 2023, the interest rate on the Facility was 8.74 %.

Green Plains Commodity Management has an uncommitted $ 40.0 million revolving credit facility to finance margins related to its hedging programs.

During the first quarter of 2023, this revolving credit facility was extended five years to

mature on April 30, 2028.

During the first quarter of 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 %.

At June 30, 2023, the interest rate on the facility was 6.81 %.

At September 30, 2023, the interest rate on the facility was 7.06 %.

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.

The company has accounted for the agreement as short-term notes, rather than revenues, and has elected the fair value option to offset

fluctuations in market prices of the inventory.

This agreement is subject to negotiated variable interest rates.

The company had no outstanding short-term notes payable related to the inventory financing agreement as of June 30, 2023.

The company had no outstanding short-term notes payable related to the inventory financing agreement as of September 30, 2023.

Partnership Segment

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however, the partnership has the option to prepay $ 1.5 million per quarter beginning twelve months after the closing date.

The partnership repurchased $ 1.0 million of the outstanding notes during the six months ended June 30, 2022.

Prepayments totaling $ 1.5 million were made during the three and six months ended June 30, 2023.

The partnership repurchased $ 1.0 million of the outstanding notes during the six months ended September 30, 2022.

Prepayments totaling $ 1.5 million and $3.0 million were made during the three and nine months ended September 30, 2023, respectively.

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

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The term loan is not guaranteed by the company.

At June 30, 2023, the interest rate on the term loan was 13.52 %.

At September 30, 2023, the interest rate on the term loan was 13.67 %.

On October 30, 2023, the partnership entered into an amendment to the term loan to include written consent from the lenders to permit the Merger to be completed.

On April 19, 2023, the term loan was amended to change the underlying floating interest rate to a SOFR-based rate from a LIBOR-based rate.

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Covenant Compliance

The company was in compliance with its debt covenants as of June 30, 2023.

The company was in compliance with its debt covenants as of September 30, 2023.

Restricted Net Assets

At June 30, 2023, there were approximately $ 119.4 million of net assets at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

At September 30, 2023, there were approximately $ 121.9 million of net assets at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries.

STOCK-BASED COMPENSATION

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The plan provides for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, performance share awards, and restricted and deferred stock unit awards, to be granted to eligible employees, non-employee directors and consultants.

The company measures stock-based compensation at fair value on the grant date, with

no adjustments for estimated forfeitures.

The company measures stock-based compensation at fair value on the grant date, with no adjustments for estimated forfeitures.

The company records noncash compensation expense related to equity awards in its consolidated financial statements over the requisite period on a straight-line basis.

Restricted Stock Awards and Deferred Stock Units

The restricted non-vested stock awards and deferred stock units activity for the six months ended June 30, 2023, is as follows:

The restricted non-vested stock awards and deferred stock units activity for the nine months ended September 30, 2023, is as follows:

Deferred Stock

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Vested ( 457,502 ) 13.63

Non-Vested at June 30, 2023 618,811 $ 30.84 1.8

Non-Vested at September 30, 2023 602,208 $ 30.90 1.5

Performance Share Awards

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On March 17, 2023, based on the criteria discussed above, the 196,382 2020 performance shares vested at approximately 123 %, which resulted in the issuance of 241,589 shares of common stock.

The non-vested performance share award activity for the six months ended June 30, 2023, is as follows:

The non-vested performance share award activity for the nine months ended September 30, 2023, is as follows:

Shares Weighted-

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Vested ( 265,296 ) 6.21

Non-Vested at June 30, 2023 415,059 $ 30.42 1.8

Non-Vested at September 30, 2023 404,740 $ 30.51 1.5

Green Plains Partners

Green Plains Partners has a long-term incentive plan (LTIP) intended to promote the interests of the partnership, its general partner and affiliates by providing unit-based incentive compensation awards to employees, consultants and directors to encourage superior performance.

The LTIP reserves 2,500,000 common limited partner units for issuance in the form of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation rights, unit awards, profit interest units or other unit-based awards.

The LTIP reserves 2.5 million common limited partner units for issuance in the form of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation

rights, unit awards, profit interest units or other unit-based awards.

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

The non-vested unit-based awards activity for the six months ended June 30, 2023, is as follows:

The non-vested unit-based awards activity for the nine months ended September 30, 2023, is as follows:

Non-Vested Units Weighted-

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Non-Vested at December 31, 2022 19,707 $ 12.18

Granted 18,549 12.94

Vested ( 19,707 ) 12.18

Non-Vested at June 30, 2023 — $ — 0.0

Non-Vested at September 30, 2023 (1)

18,549 $ 12.94 0.8

(1) Per the Merger Agreement, each of these unvested awards will become fully vested at the Effective Time of the Merger.

Stock-Based and Unit Based Compensation Expense

Compensation costs for stock-based and unit-based payment plans were $ 3.8 million and $ 6.7 million for the three and six months ended June 30, 2023, respectively, and $ 2.4 million and $ 4.3 million for the three and six months ended June 30, 2022, respectively.

At June 30, 2023, there was $ 21.8 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards.

Compensation costs for stock-based and unit-based payment plans were $ 2.7 million and $ 9.4 million for the three and nine months ended September 30, 2023, respectively, and $ 2.4 million and $ 6.6 million for the three and nine months ended September 30, 2022, respectively.

At September 30, 2023, there was $ 18.6 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards.

This compensation is expected to be recognized over a weighted-average period of approximately 1.5 years.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Net income (loss) attributable to Green Plains $ 22,311 $ ( 73,526 ) $ ( 100,617 ) $ ( 88,602 )

Interest and amortization on convertible debt, net of tax effect

4.125 % convertible notes due 2022

4.00 % convertible notes due 2024

2.25 % convertible notes due 2027

Interest and amortization on 2.25 % convertible notes due 2027, net of tax effect

Net income (loss) attributable to Green Plains - diluted $ 23,512 $ ( 73,526 ) $ ( 100,617 ) $ ( 88,602 )

Weighted average shares outstanding - basic 58,910 57,677 58,780 54,550

Effect of dilutive convertible debt

4.125 % convertible notes due 2022

4.00 % convertible notes due 2024

2.25 % convertible notes due 2027

Effect of dilutive 2.25 % convertible notes due 2027

Effect of dilutive warrants 837 — — —

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— 8,660 8,516 8,571

(1) For the three and six months ended June 30, 2023, the effects related to the company’s 2.25 % convertible notes due in 2027, warrants and certain stock-based compensation awards have been excluded from diluted EPS as the inclusion of these shares would have been anti-dilutive.

For the six months ended June 30, 2022, the effects related to the company's 4.125 % convertible notes due in 2022, 4.00 % convertible notes due in 2024, 2.25 % convertible notes due in 2027, warrants and certain stock-based compensation awards were excluded from diluted EPS as the inclusion of these shares would have been anti-dilutive.

(1) For the nine months ended September 30, 2023, the effects related to the company’s 2.25 % convertible notes due in 2027, warrants and certain stock-based compensation awards have been excluded from diluted EPS as the inclusion of these shares would have been anti-dilutive.

For the three and nine months ended September 30, 2022, the effects related to the company's 2.25 % convertible notes due in 2027, warrants and certain stock-based compensation awards were excluded from diluted EPS as the inclusion of these shares would have been anti-dilutive.

STOCKHOLDERS’ EQUITY

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

Components of stockholders’ equity for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands):

Components of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022 are as follows (in thousands):

Common Stock Additional

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Balance, June 30, 2023 62,333 62 1,107,771 ( 265,345 ) ( 33,366 ) 2,805 ( 31,174 ) 777,948 147,904 925,852

Net income — — — 22,311 — — — 22,311 3,981 26,292

Cash dividends and distributions declared — — — — — — — — ( 5,663 ) ( 5,663 )

Other comprehensive income (loss) before reclassification — — — — 14,469 — — 14,469 — 14,469

Amounts reclassified from accumulated other comprehensive income (loss) — — — — 10,767 — — 10,767 — 10,767

Other comprehensive income (loss), net of tax — — — — 25,236 — — 25,236 — 25,236

Investment in subsidiary — — — — — — — — 65 65

Stock-based compensation ( 15 ) — 2,654 — — — — 2,654 60 2,714

Balance, September 30, 2023 62,318 $ 62 $ 1,110,425 $ ( 243,034 ) $ ( 8,130 ) 2,805 $ ( 31,174 ) $ 828,149 $ 146,347 $ 974,496

Common Stock Additional

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

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

Cash dividends and distributions declared — — — — — — — — ( 5,247 ) ( 5,247 )

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

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

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

Exchange of 4.125% convertible notes due 2022 — — 19,756 — — ( 1,188 ) 13,211 32,967 — 32,967

Redemption of 4.00% convertible notes due 2024 — — 15,797 — — ( 4,251 ) 47,241 63,038 — 63,038

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

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

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

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

Three Months Ended

June 30, Six Months Ended

June 30, Statements of

September 30, Nine Months Ended

September 30, Statements of

Classification

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Commodity derivatives ( 13,234 ) ( 4,760 ) ( 18,688 ) ( 3,748 ) (2)

Total losses on cash flow hedges ( 4,736 ) ( 3,393 ) ( 6,972 ) ( 727 ) (3)

Income tax benefit 1,134 878 1,669 177 (4)

Total gains (losses) on cash flow hedges ( 14,151 ) 2,198 ( 21,123 ) 1,471 (3)

Income tax benefit (expense) 3,384 ( 536 ) 5,053 ( 359 ) (4)

Amounts reclassified from accumulated other comprehensive loss $ ( 10,767 ) $ 1,662 $ ( 16,070 ) $ 1,112

(2) Costs of goods sold

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

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

(4) Income tax benefit (expense)

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

The IRA significantly expands clean energy incentives by

providing an estimated $ 370 billion of new energy related tax credits over the next ten years.

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

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

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

The company recorded income tax benefit of $ 1.0 million for the three months ended June 30, 2023, compared with income tax expense of $ 2.9 million for the same period in 2022.

The increase in the amount of tax benefit recorded for the three months ended June 30, 2023 was primarily due to a decrease in the valuation allowance recorded against deferred tax assets related to gains (losses) on derivatives.

The company recorded income tax benefit of $ 7.8 million for the three months ended September 30, 2023, compared with income tax benefit of $ 1.9 million for the same period in 2022.

The increase in the amount of tax benefit recorded for the three months ended September 30, 2023 was primarily due to a decrease in the valuation allowance recorded against deferred tax assets related to gains (losses) on derivatives.

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

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

Operating leases 4,330 1,428 27,786 13,151

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

Operating leases (1)

3,428 — 3,428 —

(1) As part of the Atkinson disposition, the company derecognized $ 3.4 million of right-of-use assets and lease obligations related to railcar operating leases.

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

September 30,

2023 December 31,

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Year Ending December 31, Amount

2023 $ 14,558

Thereafter 12,809

Total 100,294

Present value discount ( 10,711 )

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

Lease revenue associated with agreements with Green Plains Trade are eliminated upon consolidation.

Lease revenue associated with agreements with Green Plains Trade is eliminated upon consolidation.

The remaining lease revenue is not material to the company.

Commodities, Storage and Transportation

As of June 30, 2023, the company had contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $ 335.2 million and future commitments for storage and transportation valued at approximately $ 26.8 million.

As of September 30, 2023, the company had contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $ 205.8 million and future commitments for storage and transportation valued at approximately $ 27.2 million.

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

SUBSEQUENT EVENT

On July 25, 2023, Green Plains Atkinson LLC, a wholly owned subsidiary of the company, entered into an asset purchase agreement to sell the plant located in Atkinson, Nebraska (the “Atkinson Transaction”).

Correspondingly, we entered into a separate asset purchase agreement with the Partnership to acquire the storage assets and assign the rail transportation assets to be disposed of in the Atkinson Transaction.

The Atkinson Transaction is expected to close in the next 30 days.

The assets to be divested are currently reported within the company’s ethanol production, agribusiness and energy services and partnership segments.

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

What changed 10-Q

Item 1. Financial Statements