Green Plains Inc. 10-Q

Item 1. Financial Statements. GREEN PLAINS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) September 30, 2023 December 31, 2022 (unaudited) ASSETS Current assets Cash and cash equivalents $ 326,701 $ 444,661 Restricted cash 39,459 55,615 Accounts receivable, net of allowances of $ 85 and $ 429 , respectively 142,790 108,610 Income taxes receivable 1,097 1,286 Inventories 208,061 278,950 Prepaid expenses and other 23,164 19,837 Derivative financial instruments 16,271 19,791 Total current assets 757,543 928,750 Property and equipment, net of accumulated depreciation and amortization of $ 669,936 and $ 632,298 , respectively 1,011,287 1,029,327 Operating lease right-of-use assets 79,376 73,244 Other assets 102,938 91,810 Total assets $ 1,951,144 $ 2,123,131 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 138,350 $ 234,301 Accrued and other liabilities 57,276 44,443 Derivative financial instruments 21,828 47,941 Operating lease current liabilities 23,335 20,721 Short-term notes payable and other borrowings 159,747 137,678 Current maturities of long-term debt 1,936 1,838 Total current liabilities 402,472 486,922 Long-term debt 491,945 495,243 Operating lease long-term liabilities 59,297 55,515 Other liabilities 22,934 24,385 Total liabilities 976,648 1,062,065 Commitments and contingencies (Note 13) Stockholders' equity Common stock, $ 0.001 par value; 150,000,000 shares authorized; 62,318,266 and 62,100,555 shares issued, and 59,513,207 and 59,295,496 shares outstanding, respectively 62 62 Additional paid-in capital 1,110,425 1,110,151 Retained deficit ( 243,034 ) ( 142,417 ) Accumulated other comprehensive loss ( 8,130 ) ( 26,591 ) Treasury stock, 2,805,059 shares ( 31,174 ) ( 31,174 ) Total Green Plains stockholders' equity 828,149 910,031 Noncontrolling interests 146,347 151,035 Total stockholders' equity 974,496 1,061,066 Total liabilities and stockholders' equity $ 1,951,144 $ 2,123,131 See accompanying notes to the consolidated financial statements. 4 Table of Contents GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenues $ 892,770 $ 954,977 $ 2,583,351 $ 2,748,806 Costs and expenses Cost of goods sold (excluding depreciation and amortization expenses reflected below) 811,299 956,857 2,471,395 2,650,680 Operations and maintenance expenses 6,709 6,287 21,032 18,012 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 Total costs and expenses 871,596 1,016,857 2,661,197 2,824,747 Operating income (loss) 21,174 ( 61,880 ) ( 77,846 ) ( 75,941 ) Other income (expense) Interest income 2,467 1,763 8,403 2,640 Interest expense ( 9,550 ) ( 9,576 ) ( 29,029 ) ( 26,182 ) Other, net 4,282 ( 182 ) 4,310 28,394 Total other income (expense) ( 2,801 ) ( 7,995 ) ( 16,316 ) 4,852 Income (loss) before income taxes and income (loss) from equity method investees 18,373 ( 69,875 ) ( 94,162 ) ( 71,089 ) Income tax benefit 7,763 1,888 5,353 146 Income (loss) from equity method investees 156 84 532 ( 112 ) Net income (loss) 26,292 ( 67,903 ) ( 88,277 ) ( 71,055 ) Net income attributable to noncontrolling interests 3,981 5,623 12,340 17,547 Net income (loss) attributable to Green Plains $ 22,311 $ ( 73,526 ) $ ( 100,617 ) $ ( 88,602 ) Earnings per share Net income (loss) attributable to Green Plains - basic $ 0.38 $ ( 1.27 ) $ ( 1.71 ) $ ( 1.62 ) Net income (loss) attributable to Green Plains - diluted $ 0.35 $ ( 1.27 ) $ ( 1.71 ) $ ( 1.62 ) Weighted average shares outstanding Basic 58,910 57,677 58,780 54,550 Diluted 67,402 57,677 58,780 54,550 See accompanying notes to the consolidated financial statements. 5 Table of Contents GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited and in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net income (loss) $ 26,292 $ ( 67,903 ) $ ( 88,277 ) $ ( 71,055 ) Other comprehensive income, net of tax 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 Reclassification of realized losses (gains) on derivatives, net of tax expense (benefit) of ($ 3,384 ), $ 536 , ($ 5,053 ) and $ 359 , respectively 10,767 ( 1,662 ) 16,070 ( 1,112 ) 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 ) Comprehensive income attributable to noncontrolling interests 3,981 5,623 12,340 17,547 Comprehensive income (loss) attributable to Green Plains $ 47,547 $ ( 67,448 ) $ ( 82,156 ) $ ( 87,123 ) See accompanying notes to the consolidated financial statements. 6 Table of Contents GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Nine Months Ended September 30, 2023 2022 Cash flows from operating activities Net loss $ ( 88,277 ) $ ( 71,055 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 73,911 66,013 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 ) Stock-based compensation 9,413 6,646 Loss (income) from equity method investees ( 532 ) 112 Other 1,374 1,212 Changes in operating assets and liabilities before effects of asset disposition Accounts receivable ( 34,180 ) ( 1,063 ) Inventories 65,480 ( 2,191 ) Derivative financial instruments 2,187 ( 19,985 ) Prepaid expenses and other assets ( 3,635 ) 2,911 Accounts payable and accrued liabilities ( 76,134 ) ( 30,283 ) Current income tax expense (benefit) 1,094 ( 51 ) Other 1,528 ( 1,065 ) Net cash used in operating activities ( 55,386 ) ( 34,466 ) Cash flows from investing activities 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 Investment in equity method investees ( 16,299 ) ( 6,976 ) Net cash used in investing activities ( 69,069 ) ( 90,284 ) Cash flows from financing activities Proceeds from the issuance of long-term debt — 45,000 Payments of principal on long-term debt ( 4,325 ) ( 1,347 ) Proceeds from short-term borrowings 1,027,268 1,649,828 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 ) Payments of loan fees ( 16 ) ( 2,522 ) Payments related to tax withholdings for stock-based compensation ( 8,960 ) ( 3,806 ) Other financing activities — ( 1,424 ) 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 ) Cash and cash equivalents, and restricted cash, beginning of period 500,276 560,959 Cash and cash equivalents, and restricted cash, end of period $ 366,160 $ 487,448 Continued on the following page 7 Table of Contents GREEN PLAINS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) Continued from the previous page Nine Months Ended September 30, 2023 2022 Reconciliation of total cash and cash equivalents, and restricted cash Cash and cash equivalents $ 326,701 $ 420,838 Restricted cash 39,459 66,610 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 $ — $ 64,000 Exchange of 4.125% convertible notes due 2022 for shares of common stock held in treasury stock $ — $ 32,550 Supplemental investing activities Assets disposed of in sale $ 22,314 $ — Less: liabilities relinquished (3,984) — Net assets disposed $ 18,330 $ — Supplemental disclosures of cash flow Cash paid for income taxes, net $ 787 $ 381 Cash paid for interest $ 28,160 $ 26,126 Capital expenditures in accounts payable $ 3,940 $ 10,289 See accompanying notes to the consolidated financial statements. 8 Table of Contents GREEN PLAINS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES References to the Company References to “Green Plains” or the “company” in the consolidated financial statements and in these notes to the consolidated financial statements refer to Green Plains Inc., an Iowa corporation, and its subsidiaries. Consolidated Financial Statements The consolidated financial statements include the company’s accounts and all significant intercompany balances and transactions are eliminated. Unconsolidated entities are included in the financial statements on an equity basis. 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. The company determined that the limited partners in the partnership with equity at risk lack the power, through voting rights or similar rights, to direct the activities that most significantly impact the partnership’s economic performance; therefore, the partnership is considered a variable interest entity. The company, through its ownership of the general partner interest in the partnership, has the power to direct the activities that most significantly affect economic performance and is obligated to absorb losses and has the right to receive benefits that could be significant to the partnership. Therefore, the company is considered the primary beneficiary and consolidates the partnership in the company’s financial statements. The assets of the partnership cannot be used by the company for general corporate purposes. 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 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. The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Because they do not include all of the information and footnotes required by GAAP for complete financial statements, the unaudited consolidated financial statements should be read in conjunction with the company’s annual report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 10, 2023. The unaudited financial information reflects adjustments, which are, in the opinion of management, necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented. The adjustments are normal and recurring in nature, unless otherwise noted. Interim period results are not necessarily indicative of the results to be expected for the entire year. Use of Estimates in the Preparation of Consolidated Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. 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 9 Table of Contents 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. Description of Business The company operates within three operating segments: (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. Cash and Cash Equivalents Cash and cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or less. Restricted Cash The company has restricted cash, which can only be used for funding letters of credit and for payment towards a credit agreement. Restricted cash also includes cash margins and securities pledged to commodity exchange clearinghouses and at times, funds in escrow related to acquisition and disposition activities. To the degree these segregated balances are cash and cash equivalents, they are considered restricted cash on the consolidated balance sheets. Marketable Securities Marketable securities include highly liquid, fixed maturity investments with original maturities ranging from three to twelve months and are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Revenue Recognition The company recognizes revenue when obligations under the terms of a contract with a customer are satisfied. Generally this occurs with the transfer of control of products or services. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Sales, value add, and other taxes the company collects concurrent with revenue-producing activities are excluded from revenue. Sales of ethanol, distillers grains, Ultra-High Protein, renewable corn oil, natural gas and other commodities by the company’s marketing business are recognized when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the transfer of control of products or services. Revenues related to marketing for third parties are presented on a gross basis as the company controls the product prior to the sale to the end customer, takes title of the product and has inventory risk. Unearned revenue is recorded for goods in transit when the company has received payment but control has not yet been transferred to the customer. Revenues for receiving, storing, transferring and transporting ethanol and other fuels are recognized when the product is delivered to the customer. The company routinely enters into physical-delivery energy commodity purchase and sale agreements. At times, the company settles these transactions by transferring its obligations to other counterparties rather than delivering the physical commodity. Revenues include net gains or losses from derivatives related to products sold while cost of goods sold includes net gains or losses from derivatives related to commodities purchased. Revenues also include realized gains and losses on related derivative financial instruments and reclassifications of realized gains and losses on cash flow hedges from accumulated other comprehensive income or loss. Sales of products, including agricultural commodities, are recognized when control of the product is transferred to the customer, which depends on the agreed upon shipment or delivery terms. Revenues related to grain merchandising are presented gross and include shipping and handling, which is also a component of cost of goods sold. A substantial portion of the partnership revenues are derived from fixed-fee commercial agreements for storage, terminal or transportation services. The partnership recognizes revenue upon transfer of control of product from its storage tanks and fuel terminals, when railcar volumetric capacity is provided, and as truck transportation services are performed. To the extent shortfalls associated with minimum volume commitments in the previous four quarters continue to exist, volumes in excess of the minimum volume commitment are applied to those shortfalls. Remaining excess volumes generating operating lease revenue are recognized as incurred. 10 Table of Contents Shipping and Handling Costs The company accounts for shipping and handling activities related to contracts with customers as costs to fulfill its promise to transfer the associated products. Accordingly, the company records customer payments associated with shipping and handling costs as a component of revenue, and classifies such costs as a component of cost of goods sold. Cost of Goods Sold Cost of goods sold includes materials, direct labor, shipping and plant overhead costs. Materials include the cost of corn feedstock, denaturant, and process chemicals. Corn feedstock costs include gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight charges, inspection costs and transfer costs, as well as reclassifications of gains and losses on cash flow hedges from accumulated other comprehensive income or loss. Direct labor includes all compensation and related benefits of non-management personnel involved in ethanol production. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold. Plant overhead consists primarily of plant utilities, repairs and maintenance and outbound freight charges. The company uses exchange-traded futures and options contracts and forward purchase and sale contracts to attempt to minimize the effect of price changes on ethanol, renewable corn oil, grain and natural gas. Exchange-traded futures and options contracts are valued at quoted market prices and settled predominantly in cash. The company is exposed to loss when counterparties default on forward purchase and sale contracts. Grain inventories held for sale and forward purchase and sale contracts are valued at market prices when available or other market quotes adjusted for basis differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based. Changes in forward purchase contracts and exchange-traded futures and options contracts are recognized as a component of cost of goods sold. Operations and Maintenance Expenses In the partnership segment, transportation expenses represent the primary component of operations and maintenance expenses. Transportation expenses include railcar leases, freight and shipping of the company’s ethanol and co-products, as well as costs incurred storing ethanol at destination terminals. Derivative Financial Instruments The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes including but not limited to, corn, ethanol, natural gas and other agricultural and energy products. The company monitors and manages this exposure as part of its overall risk management policy to reduce the adverse effect market volatility may have on its operating results. The company may hedge these commodities as one way to mitigate risk; however, there may be situations when these hedging activities themselves result in losses. By using derivatives to hedge exposures to changes in commodity prices, the company is exposed to credit and market risk. The company’s exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the terms of the derivative contract. The company minimizes its credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring their financial condition. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. The company manages market risk by incorporating parameters to monitor exposure within its risk management strategy, which limits the types of derivative instruments and strategies the company can use and the degree of market risk it can take using derivative instruments. Forward contracts are recorded at fair value unless the contracts qualify for, and the company elects, normal purchase or sale exceptions. Changes in fair value are recorded in operating income unless the contracts qualify for, and the company elects, cash flow hedge accounting treatment. Certain qualifying derivatives related to ethanol production and agribusiness and energy services are designated as cash flow hedges. The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow hedges. Unrealized gains and losses are reflected in accumulated other comprehensive income or loss until the gain or loss from the underlying hedged transaction is realized and the physical transaction is completed. When it becomes probable a forecasted transaction will not occur, the cash flow hedge treatment is discontinued, which affects earnings. These derivative financial instruments are recognized in current assets or current liabilities at fair value. 11 Table of Contents At times, the company hedges its exposure to changes in inventory values and designates qualifying derivatives as fair value hedges. The carrying amount of the hedged inventory is adjusted in the current period for changes in fair value. Estimated fair values carried at market are based on exchange-quoted prices, adjusted as appropriate for regional location basis values which represent differences in local markets including transportation as well as quality or grade differences. Basis values are generally determined using inputs from broker quotations or other market transactions. However, a portion of the value may be derived using unobservable inputs. Ineffectiveness of the hedges is recognized in the current period to the extent the change in fair value of the inventory is not offset by the change in fair value of the derivative. 2. REVENUE Revenue by Source The following tables disaggregate revenue by major source (in thousands): Three Months Ended September 30, 2023 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues Revenues from contracts with customers under ASC 606 Ethanol $ — $ — $ — $ — $ — Distillers grains 22,664 — — — 22,664 Renewable corn oil — — — — — Other 5,855 3,437 954 — 10,246 Intersegment revenues — 151 1,280 ( 1,431 ) — Total revenues from contracts with customers 28,519 3,588 2,234 ( 1,431 ) 32,910 Revenues from contracts accounted for as derivatives under ASC 815 (1) Ethanol 607,113 99,008 — — 706,121 Distillers grains 81,288 5,900 — — 87,188 Renewable corn oil 49,872 7,327 — — 57,199 Other 6,575 2,777 — — 9,352 Intersegment revenues — 6,481 — ( 6,481 ) — Total revenues from contracts accounted for as derivatives 744,848 121,493 — ( 6,481 ) 859,860 Leasing revenues under ASC 842 (2) — — 17,911 ( 17,911 ) — Total Revenues $ 773,367 $ 125,081 $ 20,145 $ ( 25,823 ) $ 892,770 12 Table of Contents Nine Months Ended September 30, 2023 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues Revenues from contracts with customers under ASC 606 Ethanol $ — $ — $ — $ — $ — Distillers grains 65,258 — — — 65,258 Renewable corn oil — — — — — Other 22,732 13,709 3,136 — 39,577 Intersegment revenues — 151 4,589 ( 4,740 ) — Total revenues from contracts with customers 87,990 13,860 7,725 ( 4,740 ) 104,835 Revenues from contracts accounted for as derivatives under ASC 815 (1) Ethanol 1,656,688 306,134 — — 1,962,822 Distillers grains 297,189 28,715 — — 325,904 Renewable corn oil 131,893 8,048 — — 139,941 Other 21,840 28,009 — — 49,849 Intersegment revenues — 18,524 — ( 18,524 ) — Total revenues from contracts accounted for as derivatives 2,107,610 389,430 — ( 18,524 ) 2,478,516 Leasing revenues under ASC 842 (2) — — 53,718 ( 53,718 ) — Total Revenues $ 2,195,600 $ 403,290 $ 61,443 $ ( 76,982 ) $ 2,583,351 Three Months Ended September 30, 2022 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues Revenues from contracts with customers under ASC 606 Ethanol $ — $ — $ — $ — $ — Distillers grains 3,219 — — — 3,219 Renewable corn oil — — — — — Other 7,347 2,211 1,036 — 10,594 Intersegment revenues — — 1,850 ( 1,850 ) — Total revenues from contracts with customers 10,566 2,211 2,886 ( 1,850 ) 13,813 Revenues from contracts accounted for as derivatives under ASC 815 (1) Ethanol 619,665 127,344 — — 747,009 Distillers grains 123,892 11,330 — — 135,222 Renewable corn oil 47,668 — — — 47,668 Other 9,224 2,041 — — 11,265 Intersegment revenues — 6,836 — ( 6,836 ) — Total revenues from contracts accounted for as derivatives 800,449 147,551 — ( 6,836 ) 941,164 Leasing revenues under ASC 842 (2) — — 17,180 ( 17,180 ) — Total Revenues $ 811,015 $ 149,762 $ 20,066 $ ( 25,866 ) $ 954,977 13 Table of Contents Nine Months Ended September 30, 2022 Ethanol Production Agribusiness & Energy Services Partnership Eliminations Total Revenues Revenues from contracts with customers under ASC 606 Ethanol $ — $ — $ — $ — $ — Distillers grains 19,982 — — — 19,982 Renewable corn oil — — — — — Other 27,984 5,160 2,953 — 36,097 Intersegment revenues — 234 5,788 ( 6,022 ) — Total revenues from contracts with customers 47,966 5,394 8,741 ( 6,022 ) 56,079 Revenues from contracts accounted for as derivatives under ASC 815 (1) Ethanol 1,736,228 361,036 — — 2,097,264 Distillers grains 365,839 34,629 — — 400,468 Renewable corn oil 140,513 3,957 — — 144,470 Other 19,188 31,337 — — 50,525 Intersegment revenues — 19,680 — ( 19,680 ) — Total revenues from contracts accounted for as derivatives 2,261,768 450,639 — ( 19,680 ) 2,692,727 Leasing revenues under ASC 842 (2) — — 50,079 ( 50,079 ) — Total Revenues $ 2,309,734 $ 456,033 $ 58,820 $ ( 75,781 ) $ 2,748,806 (1) Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC 606. (2) Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, and are accounted for under ASC 842, Leases . Major Customers 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. 3. 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, 14 Table of Contents 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. 15 Table of Contents 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. 4. FAIR VALUE DISCLOSURES The following methods, assumptions and valuation techniques were used in estimating the fair value of the company’s financial instruments: Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities the company can access at the measurement date. Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or other means. Grain inventories held for sale in the agribusiness and energy services segment as well as forward commodity purchase and sale contracts are valued at nearby futures values, plus or minus nearby basis values, which represent differences in local markets, including transportation or commodity quality or grade differences. Level 3 – unobservable inputs that are supported by little or no market activity and comprise a significant component of the fair value of the assets or liabilities. The company currently does not have any recurring Level 3 financial instruments. Derivative contracts include exchange-traded commodity futures and options contracts and forward commodity purchase and sale contracts. Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified in Level 1. The majority of the company’s exchange-traded futures and options contracts are cash-settled on a daily basis. 16 Table of Contents There have been no changes in valuation techniques and inputs used in measuring fair value. The company’s assets and liabilities by level are as follows (in thousands): Fair Value Measurements at September 30, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash and cash equivalents $ 326,701 $ — $ 326,701 Restricted cash 39,459 — 39,459 Inventories carried at market — 18,758 18,758 Derivative financial instruments - assets — 14,037 14,037 Other assets 110 1 111 Total assets measured at fair value $ 366,270 $ 32,796 $ 399,066 Liabilities Accounts payable (1) $ — $ 20,093 $ 20,093 Accrued and other liabilities (2) — 6,269 6,269 Derivative financial instruments - liabilities — 21,577 21,577 Other liabilities (2) — 3,411 3,411 Total liabilities measured at fair value $ — $ 51,350 $ 51,350 Fair Value Measurements at December 31, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Total Assets Cash and cash equivalents $ 444,661 $ — $ 444,661 Restricted cash 55,615 — 55,615 Inventories carried at market — 61,885 61,885 Derivative financial instruments - assets — 16,420 16,420 Other assets 110 1 111 Total assets measured at fair value $ 500,386 $ 78,306 $ 578,692 Liabilities Accounts payable (1) $ — $ 31,925 $ 31,925 Accrued and other liabilities (2) — 1,909 1,909 Derivative financial instruments - liabilities — 44,686 44,686 Other liabilities (2) — 6,640 6,640 Total liabilities measured at fair value $ — $ 85,160 $ 85,160 (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 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 17 Table of Contents 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 $ 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. 5. SEGMENT INFORMATION The company reports the financial and operating performance for the following three operating segments: (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, Ultra-High Protein, renewable corn oil, natural gas and other commodities, and (3) partnership, which includes fuel storage and transportation services. Corporate activities include selling, general and administrative expenses, consisting primarily of compensation, professional fees and overhead costs not directly related to a specific operating segment. During the normal course of business, the operating segments conduct business with each other. For example, the agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers grains, Ultra-High Protein and renewable corn oil for the ethanol production segment. The partnership segment provides fuel storage and transportation services for the ethanol production segment. These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values. Consequently, these transactions affect segment performance; however, they do not impact the company’s consolidated results since the revenues and corresponding costs are eliminated. The following tables set forth certain financial data for the company’s operating segments (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenues Ethanol production Revenues from external customers $ 773,367 $ 811,015 $ 2,195,600 $ 2,309,734 Intersegment revenues — — — — Total segment revenues 773,367 811,015 2,195,600 2,309,734 Agribusiness and energy services Revenues from external customers 118,449 142,926 384,615 436,119 Intersegment revenues 6,632 6,836 18,675 19,914 Total segment revenues 125,081 149,762 403,290 456,033 Partnership Revenues from external customers 954 1,036 3,136 2,953 Intersegment revenues 19,191 19,030 58,307 55,867 Total segment revenues 20,145 20,066 61,443 58,820 Revenues including intersegment activity 918,593 980,843 2,660,333 2,824,587 Intersegment eliminations ( 25,823 ) ( 25,866 ) ( 76,982 ) ( 75,781 ) $ 892,770 $ 954,977 $ 2,583,351 $ 2,748,806 18 Table of Contents Refer to Note 2 - Revenue , for further disaggregation of revenue by operating segment. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of goods sold Ethanol production $ 728,360 $ 843,843 $ 2,176,253 $ 2,310,224 Agribusiness and energy services 109,292 139,922 371,981 418,017 Intersegment eliminations ( 26,353 ) ( 26,908 ) ( 76,839 ) ( 77,561 ) $ 811,299 $ 956,857 $ 2,471,395 $ 2,650,680 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Gross margin Ethanol production $ 45,007 $ ( 32,828 ) $ 19,347 $ ( 490 ) Agribusiness and energy services 15,789 9,840 31,309 38,016 Partnership 20,145 20,066 61,443 58,820 Intersegment eliminations 530 1,042 ( 143 ) 1,780 $ 81,471 $ ( 1,880 ) $ 111,956 $ 98,126 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating income (loss) Ethanol production (1) $ 11,973 $ ( 64,121 ) $ ( 77,759 ) $ ( 87,773 ) Agribusiness and energy services 11,313 5,205 17,612 25,894 Partnership 11,428 11,993 34,744 35,906 Intersegment eliminations 530 1,042 ( 143 ) 1,780 Corporate activities (2) ( 14,070 ) ( 15,999 ) ( 52,300 ) ( 51,748 ) $ 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Depreciation and amortization Ethanol production $ 21,816 $ 21,555 $ 67,179 $ 59,101 Agribusiness and energy services 534 1,280 1,883 2,214 Partnership 780 1,194 2,424 2,915 Corporate activities 769 618 2,425 1,783 $ 23,899 $ 24,647 $ 73,911 $ 66,013 19 Table of Contents The following table sets forth total assets by operating segment (in thousands): September 30, 2023 December 31, 2022 Total assets (1) Ethanol production $ 1,158,191 $ 1,157,791 Agribusiness and energy services 481,793 489,083 Partnership 108,773 108,680 Corporate assets 216,649 386,437 Intersegment eliminations ( 14,262 ) ( 18,860 ) $ 1,951,144 $ 2,123,131 (1) Asset balances by segment exclude intercompany balances. 6. INVENTORIES Inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories. 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, 2022 Finished goods $ 83,214 $ 97,719 Commodities held for sale 18,758 61,885 Raw materials 42,211 55,983 Work-in-process 15,568 18,499 Supplies and parts 48,310 44,864 $ 208,061 $ 278,950 7. DERIVATIVE FINANCIAL INSTRUMENTS 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. The amount realized in operating income (loss) will differ as commodity prices change. 20 Table of Contents Fair Values of Derivative Instruments The fair values of the company’s derivative financial instruments and the line items on the consolidated balance sheets where they are reported are as follows (in thousands): Asset Derivatives' Fair Value Liability Derivatives' Fair Value September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022 Derivative financial instruments - forwards $ 14,037 (1) $ 16,420 (2) $ 21,577 (3) $ 44,686 (4) Other assets 1 1 — — Other liabilities — — 234 — Total $ 14,038 $ 16,421 $ 21,811 $ 44,686 (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 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. Refer to Note 4 - Fair Value Disclosures , which contains fair value information related to derivative financial instruments. Effect of Derivative Instruments on Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income The gains or losses recognized in income and other comprehensive income related to the company’s derivative financial instruments and the line items on the consolidated financial statements where they are reported are as follows (in thousands): Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Revenues $ ( 917 ) $ 6,958 $ ( 2,435 ) $ 5,219 Cost of goods sold ( 13,234 ) ( 4,760 ) ( 18,688 ) ( 3,748 ) 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 Gain (Loss) Recognized in Other Comprehensive Income on Derivatives Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Commodity contracts $ 19,016 $ 10,234 $ 3,137 $ 3,427 21 Table of Contents A portion of the company’s derivative instruments are considered economic hedges and as such are not designated as hedging instruments. The company uses exchange-traded futures and options contracts to manage its net position of product inventories and forward cash purchase and sales contracts to reduce price risk caused by market fluctuations. Derivatives, including exchange traded contracts and forward commodity purchase or sale contracts, and inventories of certain agricultural products, which include amounts acquired under deferred pricing contracts, are stated at fair value. Fair value estimates are based on exchange-quoted prices, adjusted as appropriate for regional location basis value, which represent differences in local markets including transportation as well as quality or grade differences. Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income on Derivatives Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Exchange-traded futures and options Revenues $ 3,484 $ 1,302 $ ( 7,661 ) $ 1,271 Forwards Revenues 121 ( 4,775 ) 4,747 ( 508 ) Exchange-traded futures and options Cost of goods sold 295 ( 13,455 ) 34,028 ( 53,663 ) Forwards Cost of goods sold 23,347 16,231 ( 8,940 ) ( 2,066 ) 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): 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 Inventories $ 18,758 $ 1,188 $ 61,885 $ ( 13,776 ) 22 Table of Contents 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 September 30, 2023 2022 Revenue Cost of Goods Sold Revenue Cost of Goods Sold Gain (loss) on cash flow hedging relationships Commodity contracts Amount of gain (loss) on exchange-traded futures reclassified from accumulated other comprehensive income into income $ ( 917 ) $ ( 13,234 ) $ 6,958 $ ( 4,760 ) Gain (loss) on fair value hedging relationships Commodity contracts Fair-value hedged inventories — 1,135 — 1,656 Exchange-traded futures designated as hedging instruments — ( 1,122 ) — ( 4,262 ) 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 Nine Months Ended September 30, 2023 2022 Revenue Cost of Goods Sold Revenue Cost of Goods Sold Gain (loss) on cash flow hedging relationships Commodity contracts Amount of gain (loss) on exchange traded futures reclassified from accumulated other comprehensive income into income $ ( 2,435 ) $ ( 18,688 ) $ 5,219 $ ( 3,748 ) Gain (loss) on fair value hedging relationships Commodity contracts Fair-value hedged inventories — ( 9,286 ) — 11,492 Exchange-traded futures designated as hedging instruments — 10,803 — ( 8,973 ) 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 ) 23 Table of Contents The notional volume of open commodity derivative positions as of September 30, 2023, are as follows (in thousands): Exchange-Traded (1) Non-Exchange-Traded (2) Derivative Instruments Net Long & (Short) Long (Short) Unit of Measure Commodity Futures ( 13,750 ) Bushels Corn Futures ( 420 ) (4) Bushels Corn Futures ( 5,880 ) Gallons Ethanol Futures ( 1,315 ) MmBTU Natural Gas Futures 6,080 (3) 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 Forwards 25,672 3 Bushels Corn Forwards 6,844 ( 230,170 ) Gallons Ethanol Forwards 86 ( 337 ) Tons Distillers Grains Forwards — ( 81,881 ) Pounds Renewable Corn Oil Forwards 10,816 ( 439 ) MmBTU Natural Gas (1) Notional volume of exchange-traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis. (2) Notional volume of non-exchange-traded forward physical contracts are presented on a gross long and (short) position basis, including both fixed-price and basis contracts, for which only the basis portion of the contract price is fixed. (3) Notional volume of exchange-traded futures used for cash flow hedges. (4) Notional volume of exchange-traded futures used for fair value hedges. Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Included in revenues are net 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. 24 Table of Contents 8. DEBT The components of long-term debt are as follows (in thousands): September 30, 2023 December 31, 2022 Corporate 2.25 % convertible notes due 2027 (1) $ 230,000 $ 230,000 Green Plains SPE LLC $ 125.0 million junior secured mezzanine notes due 2026 (2) 125,000 125,000 Green Plains Wood River and Green Plains Shenandoah $ 75.0 million loan agreement (3) 73,500 74,625 Green Plains Partners $ 60.0 million term loan (4) 55,969 58,969 Other 14,830 15,097 Total book value of long-term debt 499,299 503,691 Unamortized debt issuance costs ( 5,418 ) ( 6,610 ) Less: current maturities of long-term debt ( 1,936 ) ( 1,838 ) Total long-term debt $ 491,945 $ 495,243 (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, 2022 Green Plains Finance Company, Green Plains Grain and Green Plains Trade $ 350.0 million revolver $ 150,000 $ 115,000 Green Plains Commodity Management $ 40.0 million hedge line 9,747 22,678 $ 159,747 $ 137,678 Corporate Activities In March 2021, the company issued an aggregate $ 230.0 million of 2.25 % convertible senior notes due in 2027, or the 2.25 % notes. The 2.25 % notes bear interest at a rate of 2.25 % per year, payable on March 15 and September 15 of each year, beginning September 15, 2021, and mature on March 15, 2027. The 2.25 % notes are senior, unsecured obligations of the company. The 2.25 % notes are convertible, at the option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common stock, or a combination of cash and stock (and cash in lieu of fractional shares). However, before September 15, 2026, the 2.25 % notes will not be convertible unless certain conditions are satisfied. The 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. The conversion rate is subject to adjustment upon the occurrence of certain events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and warrants; spinoffs; or a tender or exchange offering. In addition, the company may be obligated to increase the conversion rate for any conversion that occurs in connection with certain corporate events, including the company’s calling the 2.25 % notes for redemption. 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 25 Table of Contents 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. In addition, upon the occurrence of a “fundamental change” (as defined in the indenture for the 2.25 % notes), holders of the 2.25 % notes will have the right, at their option, to require the company to repurchase their 2.25 % notes for cash at a price equal to 100 % of the principal amount of the 2.25 % notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. During June 2019, the company issued an aggregate $ 115.0 million of 4.00 % convertible senior notes due in 2024, or the 4.00 % notes. The 4.00 % notes were senior, unsecured obligations of the company, with interest payable on January 1 and July 1 of each year, beginning January 1, 2020, at a rate of 4.00 % per annum. The 4.00 % notes were convertible, at the option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common stock, or a combination of cash and shares of the company’s common stock until the close of business on the scheduled trading day immediately preceding the maturity date. The initial conversion rate was 64.1540 shares of common stock per $1,000 of principal, which was equal to a conversion price of approximately $ 15.59 per share. During May 2021, the company entered into a privately negotiated agreement with certain noteholders of the company’s 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. The final conversion rate was 66.4178 shares of common stock per $1,000 of principal. From July 1, 2022 through July 8, 2022, the remaining $ 64.0 million of the 4.00 % notes were converted into approximately 4.3 million shares of common stock. Common stock held as treasury shares were exchanged for the 4.00 % notes. Pursuant to the guidance within ASC 470, Debt , the company recorded the exchanges as a conversion. The 4.00 % notes were retired effective July 8, 2022. In August 2016, the company issued $ 170.0 million of 4.125 % convertible senior notes due in 2022, or the 4.125 % notes. The 4.125 % notes were senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year. The notes were convertible at the Holder’s option. The initial conversion rate was 35.7143 shares of common stock per $1,000 of principal, which was equal to a conversion price of approximately $ 28.00 per share. In March 2021, concurrent with the issuance of the 2.25 % notes, the company used approximately $ 156.5 million of the net proceeds of the 2.25 % notes to repurchase approximately $ 135.7 million aggregate principal amount of the 4.125 % notes, in privately negotiated transactions. During August 2022, the company entered into four privately negotiated exchange agreements with certain noteholders of the 4.125 % notes to exchange approximately $ 32.6 million aggregate principal amount for approximately 1.2 million shares of the company's common stock. Pursuant to the guidance within ASC 470, Debt , the company recorded the exchanges as a conversion and recorded a loss of $ 419 thousand, which was recorded as a charge to interest expense in the consolidated financial statements during the year ended December 31, 2022. Additionally, on September 1, 2022, approximately $ 1.7 million aggregate principal amount of the 4.125 % notes were settled through a combination of $ 1.7 million in cash and approximately 15 thousand shares of the company's common stock. The remaining $ 23 thousand aggregate principal amount and accrued interest were settled in cash. The 4.125 % notes were fully retired effective September 1, 2022. Ethanol Production Segment 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, a holder of a portion of the company’s common stock. 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. The proceeds of the Junior Notes were used to construct high protein processing systems at the Green Plains Obion and Green Plains Mount Vernon facilities. 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. The entire outstanding principal balance, plus any accrued and unpaid interest is due upon maturity. Green Plains SPE LLC is required to comply with certain financial covenants regarding minimum liquidity at Green Plains and a maximum aggregate loan to value. The Junior Notes can be retired or refinanced after 42 months with no prepayment premium. The Junior Notes have an unsecured 26 Table of Contents 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™ 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. The remaining availability was drawn in the first quarter of 2022. Beginning in the second quarter of 2022, the interest rate premium may be adjusted quarterly from 0.00 % to 1.50 % based on the leverage ratio of total funded debt to EBITDA of Wood River and Shenandoah. Principal payments of $ 1.5 million per year began 24 months from the closing date. Prepayments are prohibited until September 2024. Financial covenants of the loan agreement include a minimum loan to value ratio of 50 %, a minimum fixed charge coverage ratio of 1.25 x, a total debt service reserve of six months of future principal and interest payments and a minimum working capital requirement at Green Plains of not less than $ 0.10 per gallon of nameplate capacity or $ 95.8 million. The loan is guaranteed by the company and has certain limitations on distributions, dividends or loans to Green Plains by Wood River and Shenandoah unless immediately after giving effect to such action, there will not exist any event of default. 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. Agribusiness and Energy Services Segment On March 25, 2022, Green Plains Finance Company, Green Plains Grain and Green Plains Trade (collectively, the “Borrowers”), all wholly owned subsidiaries of the company, together with the company, as guarantor, entered into a five-year , $ 350.0 million senior secured sustainability-linked revolving Loan and Security Agreement (the “Facility”) with a group of financial institutions. This transaction refinanced the separate credit facilities previously held by Green Plains Grain and Green Plains Trade. The Facility matures on March 25, 2027. The Facility includes revolving commitments totaling $ 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. 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. Each base rate loan shall bear interest at a rate per annum equal to the base rate plus the applicable margin of 1.25 % to 1.50 %, which is dependent on undrawn availability under the Facility. The unused portion of the Facility is also subject to a commitment fee of 0.275 % to 0.375 %, dependent on undrawn availability. Additionally, the applicable margin and commitment fee are subject to certain increases or decreases of up to 0.10 % and 0.025 %, respectively, tied to the company’s achievement of certain sustainability criteria, including the reduction of GHG emissions, recordable incident rate reduction, increased renewable corn oil production and the implementation of technology to produce sustainable ingredients. The Facility contains customary affirmative and negative covenants, as well as the following financial covenants to be calculated as of the last day of any month: the current ratio of the Borrowers shall not be less than 1.00 to 1.00; the collateral coverage ratio of the Borrowers shall not be less than 1.20 to 1.00; and the debt to capitalization ratio of the company shall not be greater than 0.60 to 1.00. The Facility also includes customary events of default, including without limitation, failure to make required payments of principal or interest, material incorrect representations and warranties, breach of covenants, events of bankruptcy and other certain matters. The Facility is secured by the working capital assets of the Borrowers and is guaranteed by the company. 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. Advances are subject to variable interest rates equal to SOFR plus 1.75 %. 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 27 Table of Contents fluctuations in market prices of the inventory. This agreement is subject to negotiated variable interest rates. The company had no outstanding short-term notes payable related to the inventory financing agreement as of September 30, 2023. Partnership Segment Green Plains Partners has a term loan to fund working capital, capital expenditures and other general partnership purposes. The term loan has a maturity date of July 20, 2026. Interest on the term loan is based on 3-month SOFR plus 8.26 %, and is payable on the 15th day of each March, June, September and December. The term loan does not require any principal payments; 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 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. The terms impose affirmative and negative covenants, including restrictions on the partnership’s ability to incur additional debt, acquire and sell assets, create liens, invest capital, pay distributions and materially amend the partnership’s commercial agreements with Green Plains Trade. The term loan also requires the partnership to maintain a maximum consolidated leverage ratio and a minimum consolidated debt service coverage ratio as of the end of any fiscal quarter, each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period. The maximum consolidated leverage ratio is required to be no more than 2.50 x. The minimum debt service coverage ratio is required to be no less than 1.10 x. The consolidated leverage ratio is calculated by dividing total funded indebtedness by the sum of the four preceding fiscal quarters’ consolidated EBITDA. The consolidated debt service coverage ratio is calculated by taking the sum of the four preceding fiscal quarters’ consolidated EBITDA minus income taxes and consolidated capital expenditures for such period divided by the sum of the four preceding fiscal quarters’ consolidated interest charges plus consolidated scheduled funded debt payments for such period. Under the terms of the loan, the partnership has no restrictions on the amount of quarterly distribution payments, so long as (i) no default has occurred and is continuing, or would result from payment of the distribution, and (ii) the partnership and its subsidiaries are in compliance with its financial covenants and remain in compliance after payment of the distribution. The term loan is not guaranteed by the company. 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. The impact of the amendment was not material to interest expense. Covenant Compliance The company was in compliance with its debt covenants as of September 30, 2023. Restricted Net Assets 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. 9. STOCK-BASED COMPENSATION The company has an equity incentive plan which reserved a total of 5.7 million shares of common stock for issuance pursuant to the plan, of which 1.4 million shares remain available for issuance. 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 records noncash compensation expense related to equity awards in its consolidated financial statements over the requisite period on a straight-line basis. 28 Table of Contents Restricted Stock Awards and Deferred Stock Units The restricted non-vested stock awards and deferred stock units activity for the nine months ended September 30, 2023, is as follows: Non-Vested Shares and Deferred Stock Units Weighted- Average Grant- Date Fair Value Weighted-Average Remaining Vesting Term (in years) Non-Vested at December 31, 2022 813,033 $ 19.98 Granted 288,755 34.07 Forfeited ( 42,078 ) 29.42 Vested ( 457,502 ) 13.63 Non-Vested at September 30, 2023 602,208 $ 30.90 1.5 Performance Share Awards On March 9, 2023, March 14, 2022, and February 18, 2021, the board of directors granted performance shares to be awarded in the form of common stock to certain participants of the plan. These performance shares vest based on the level of achievement of certain performance goals, including the incremental value achieved from the company's high-protein initiatives, annual production levels and return on investment (ROI). Performance shares granted in 2023, 2022 and 2021 do not contain market based factors requiring a Monte Carlo valuation model. The performance shares were granted at a target of 100 %, but each performance share can be reduced or increased depending on results for the performance period. If the company achieves the maximum performance goals, the maximum amount of shares available to be issued pursuant to the 2023, 2022 and 2021 awards are 904,418 performance shares which represents approximately 223 % of the 404,740 performance shares which remain outstanding. The actual number of performance shares that will ultimately vest is based on the actual performance targets achieved at the end of the performance period. On March 18, 2020, the board of directors granted performance shares to be awarded in the form of common stock to certain participants of the plan. The performance shares were granted at a target of 100 %, but each performance share was reduced or increased depending on results for the performance period for the company’s total shareholder return relative to that of the company’s performance peer group. 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 nine months ended September 30, 2023, is as follows: Performance Shares Weighted- Average Grant- Date Fair Value Weighted-Average Remaining Vesting Term (in years) Non-Vested at December 31, 2022 482,811 $ 18.22 Granted 200,294 27.74 Forfeited ( 13,069 ) 27.50 Vested ( 265,296 ) 6.21 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 2.5 million common limited partner units for issuance in the form of options, restricted units, phantom units, distribution equivalent rights, substitute awards, unit appreciation 29 Table of Contents 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 nine months ended September 30, 2023, is as follows: Non-Vested Units Weighted- Average Grant- Date Fair Value Weighted-Average Remaining Vesting Term (in years) Non-Vested at December 31, 2022 19,707 $ 12.18 Granted 18,549 12.94 Vested ( 19,707 ) 12.18 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 $ 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. The potential tax benefit related to stock-based payment is approximately 23.9 % of these expenses. 10. EARNINGS PER SHARE Basic earnings per share, or EPS, is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. The company computes diluted EPS by dividing net income on an if-converted basis, adjusted to add back net interest expense related to the convertible debt instruments, by the weighted average number of common shares outstanding during the period, adjusted to include the shares that would be issued if the convertible debt instruments were converted to common shares and the effect of any outstanding dilutive securities. 30 Table of Contents The basic and diluted EPS are calculated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 EPS - basic Net income (loss) attributable to Green Plains $ 22,311 $ ( 73,526 ) $ ( 100,617 ) $ ( 88,602 ) Weighted average shares outstanding - basic 58,910 57,677 58,780 54,550 EPS - basic $ 0.38 $ ( 1.27 ) $ ( 1.71 ) $ ( 1.62 ) EPS - diluted Net income (loss) attributable to Green Plains $ 22,311 $ ( 73,526 ) $ ( 100,617 ) $ ( 88,602 ) Interest and amortization on 2.25 % convertible notes due 2027, net of tax effect 1,201 — — — 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 2.25 % convertible notes due 2027 7,273 — — — Effect of dilutive warrants 837 — — — Effect of dilutive stock-based compensation awards 382 — — — Weighted average shares outstanding - diluted $ 67,402 $ 57,677 $ 58,780 $ 54,550 EPS - diluted $ 0.35 $ ( 1.27 ) $ ( 1.71 ) $ ( 1.62 ) Anti-dilutive weighted-average convertible debt, warrants and stock-based compensation (1) — 8,660 8,516 8,571 (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. 11. STOCKHOLDERS’ EQUITY Convertible Note Exchange On May 25, 2022, the company gave notice calling for the redemption of all its outstanding 4.00 % Convertible Senior Notes due 2024, totaling an aggregate principal amount of $ 64.0 million. The conversion rate was 66.4178 shares of common stock per $1,000 of principal. From July 1, 2022 through July 8, 2022, all $ 64.0 million of the 4.00 % convertible notes were converted into approximately 4.3 million shares of common stock. During August 2022, the company entered into four privately negotiated exchange agreements with certain noteholders of the 4.125 % Convertible Senior Notes due 2022 to exchange approximately $ 32.6 million aggregate principal amount for approximately 1.2 million shares of the company's common stock. Additionally, on September 1, 2022, approximately $ 1.7 million aggregate principal amount was settled through a combination of $ 1.7 million in cash and approximately 15 thousand shares of the company's common stock. 31 Table of Contents Components of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022 are as follows (in thousands): Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Green Plains Stockholders' Equity Non- Controlling Interests Total Stockholders' Equity Shares Amount Shares Amount Balance, December 31, 2022 62,101 $ 62 $ 1,110,151 $ ( 142,417 ) $ ( 26,591 ) 2,805 $ ( 31,174 ) $ 910,031 $ 151,035 $ 1,061,066 Net loss — — — ( 70,324 ) — — — ( 70,324 ) 4,075 ( 66,249 ) Cash dividends and distributions declared — — — — — — — — ( 5,305 ) ( 5,305 ) Other comprehensive loss before reclassification — — — — ( 12,788 ) — — ( 12,788 ) — ( 12,788 ) Amounts reclassified from accumulated other comprehensive loss — — — — 1,701 — — 1,701 — 1,701 Other comprehensive loss, net of tax — — — — ( 11,087 ) — — ( 11,087 ) — ( 11,087 ) Investment in subsidiaries — — — — — — — — 185 185 Stock-based compensation 217 — ( 5,632 ) — — — — ( 5,632 ) 59 ( 5,573 ) Balance, March 31, 2023 62,318 62 1,104,519 ( 212,741 ) ( 37,678 ) 2,805 ( 31,174 ) 822,988 150,049 973,037 Net loss — — — ( 52,604 ) — — — ( 52,604 ) 4,284 ( 48,320 ) Cash dividends and distributions declared — — — — — — — — ( 6,497 ) ( 6,497 ) Other comprehensive loss before reclassification — — — — 710 — — 710 — 710 Amounts reclassified from accumulated other comprehensive loss — — — — 3,602 — — 3,602 — 3,602 Other comprehensive income, net of tax — — — — 4,312 — — 4,312 — 4,312 Investment in subsidiaries — — — — — — — — 8 8 Stock-based compensation 15 — 3,252 — — — — 3,252 60 3,312 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 32 Table of Contents Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Green Plains Stockholders' Equity Non- Controlling Interests Total Stockholders' Equity Shares Amount Shares Amount Balance, December 31, 2021 61,840 $ 62 $ 1,069,573 $ ( 15,199 ) $ ( 12,310 ) 8,244 $ ( 91,626 ) $ 950,500 $ 151,519 $ 1,102,019 Net income (loss) — — — ( 61,474 ) — — — ( 61,474 ) 5,602 ( 55,872 ) Cash dividends and distributions declared — — — — — — — — ( 5,122 ) ( 5,122 ) Other comprehensive income (loss) before reclassification — — — — 5,386 — — 5,386 — 5,386 Amounts reclassified from accumulated other comprehensive income (loss) — — — — ( 1,965 ) — — ( 1,965 ) — ( 1,965 ) Other comprehensive income, net of tax — — — — 3,421 — — 3,421 — 3,421 Investment in subsidiaries — — — — — — — — 24 24 Stock-based compensation 226 — ( 1,922 ) — — — — ( 1,922 ) 59 ( 1,863 ) Balance, March 31, 2022 62,066 62 1,067,651 ( 76,673 ) ( 8,889 ) 8,244 ( 91,626 ) 890,525 152,082 1,042,607 Net income — — — 46,398 — — — 46,398 6,322 52,720 Cash dividends and distributions declared — — — — — — — — ( 8,098 ) ( 8,098 ) Other comprehensive income (loss) before reclassification — — — — ( 10,535 ) — — ( 10,535 ) — ( 10,535 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — — 2,515 — — 2,515 — 2,515 Other comprehensive loss, net of tax — — — — ( 8,020 ) — — ( 8,020 ) — ( 8,020 ) Investment in subsidiaries — — — — — — — — 190 190 Stock-based compensation 21 — 2,270 — — — — 2,270 60 2,330 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 33 Table of Contents Amounts reclassified from accumulated other comprehensive loss are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, Statements of Operations Classification 2023 2022 2023 2022 Gains (losses) on cash flow hedges Commodity derivatives $ ( 917 ) $ 6,958 $ ( 2,435 ) $ 5,219 (1) Commodity derivatives ( 13,234 ) ( 4,760 ) ( 18,688 ) ( 3,748 ) (2) 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 (1) Revenues (2) Costs of goods sold (3) Income (loss) before income taxes and income (loss) from equity method investees (4) Income tax benefit (expense) 12. INCOME TAXES The company records actual income tax expense or benefit during interim periods rather than on an annual effective tax rate method. Certain items are given discrete period treatment and the tax effect of those items are reported in full in the relevant interim period. Green Plains Partners is a limited partnership, which is treated as a flow-through entity for federal income tax purposes and is not subject to federal income taxes. As a result, the consolidated financial statements do not reflect such income taxes on pre-tax income or loss attributable to the noncontrolling interest in the partnership. The Inflation Reduction Act (IRA), was signed into law on August 16, 2022. The IRA includes significant law changes relating to tax, climate change, energy and health care. The IRA significantly expands clean energy incentives by providing an estimated $ 370 billion of new energy related tax credits over the next ten years. It also permits more flexibility for taxpayers to use the credits with direct-pay and transferable credit options. In addition, the IRA includes key revenue-raising provisions which include a 15% book-income alternative minimum tax on corporations with adjusted financial statement income over $ 1 billion, a 1% excise tax on the value of certain net stock repurchases by publicly traded companies, and the reinstatement of Superfund excise taxes. The company expects it will benefit from certain energy related tax credits in future years and not be negatively impacted by the revenue raising provisions; however, the company does not have enough information to provide a reasonable estimate of future tax benefits at this time. The company recorded income tax benefit of $ 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. 13. COMMITMENTS AND CONTINGENCIES Lease Expense The company leases certain facilities, parcels of land, and equipment, with remaining terms ranging from less than one year to approximately 14.1 years. The land and facility leases include renewal options. The renewal options are included in the lease term only for those sites or locations in which they are reasonably certain to be renewed. Equipment renewals are not considered reasonably certain to be exercised as they typically renew with significantly different underlying terms. 34 Table of Contents The components of lease expense are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Lease expense Operating lease expense $ 7,155 $ 5,220 $ 20,744 $ 15,608 Variable lease expense (benefit) (1) 211 776 ( 96 ) 1,181 Total lease expense $ 7,366 $ 5,996 $ 20,648 $ 16,789 (1) Represents amounts incurred in excess of the minimum payments required for a certain building lease and for the handling and unloading of railcars for a certain land lease, offset by railcar lease abatements provided by the lessor when railcars are out of service during periods of maintenance or upgrade. Supplemental cash flow information related to operating leases is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,075 $ 4,949 $ 19,914 $ 14,823 Right-of-use assets obtained in exchange for lease obligations 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, 2022 Weighted average remaining lease term 4.6 years 4.9 years Weighted average discount rate 5.09 % 4.32 % 35 Table of Contents Aggregate minimum lease payments under the operating lease agreements for the remainder of 2023 and in future years are as follows (in thousands): Year Ending December 31, Amount 2023 $ 7,334 2024 25,824 2025 21,256 2026 14,808 2027 11,312 Thereafter 12,809 Total 93,343 Less: Present value discount ( 10,711 ) Lease liabilities $ 82,632 Lease Revenue As described in Note 2 – Revenue , the majority of the partnership’s segment revenue is generated through their storage and throughput services and rail transportation services agreements with Green Plains Trade and are accounted for as lease revenue. 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 is eliminated upon consolidation. The remaining lease revenue is not material to the company. Commodities, Storage and Transportation 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. Legal 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. 36 Table of Contents