What changed in this filing

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Item 1. Business

2024-02-09 compared with 2023-02-10 · 86 added, 100 removed, 223 unchanged (45% of the section changed)

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and its subsidiaries.

Green Plains is an Iowa corporation founded in June 2004 as a producer of low-carbon fuels.

We have since grown to be a leading biorefining company maximizing the potential of existing resources through fermentation and patented agricultural technologies.

Our eleven biorefineries process up to 330 million bushels of corn annually into a suite of sustainable ingredients, including low-carbon biofuels, renewable feedstocks for advanced biofuels and high-protein ingredients for animal diets.

We are a leading ag-tech innovator undergoing a transition from a commodity-processing business into a value-added agricultural technology company creating sustainable, high-value ingredients from existing resources.

To that end, we are currently executing on a number of initiatives directed at producing additional value-added low-carbon ingredients, such as Ultra-High Protein, dextrose, renewable corn oil, and more.

We are developing and implementing proven agricultural, food and industrial biotechnology systems that allow for product diversification and new market opportunities, rapidly expanding installation and production across our facilities, and offering these technologies to the broader biofuels industry.

Green Plains is an Iowa corporation, founded in June 2004 as a producer of low-carbon fuels and has grown to be a leading biorefining company maximizing the potential of existing resources through fermentation and patented agribusiness technologies.

We continue the transition from a commodity-processing business to a value-added agricultural technology company creating sustainable, high-value ingredients from existing resources.

To that end, we are currently executing on a number of initiatives to develop and implement proven agricultural, food and industrial biotechnology systems that allow for product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as Ultra-High Protein, dextrose, renewable corn oil and more, as well as offering these technologies to the broader biofuels industry.

Green Plains Partners LP, a master limited partnership, is our primary downstream storage and logistics provider since its assets are the principal method of storing and delivering the ethanol we produce.

As of December 31, 2022, we own a 48.8% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights.

The public owns the remaining 49.2% limited partner interest.

The partnership is consolidated in our financial statements.

As of December 31, 2023, we owned a 48.8% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights.

The public owned the remaining 49.2% limited partner interest.

The partnership is consolidated in our financial statements, and we record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.

On January 9, 2024, pursuant to the Merger Agreement, we completed the acquisition of all the publicly held common units of the partnership not already owned by us and our affiliates.

As a result of the Merger, the partnership common units are no longer publicly traded.

Refer to Note 5 - Acquisition and Dispositions included in the notes to the audited consolidated financial statements included herein for more information.

We group our business activities into the following three operating segments to manage performance:

• Ethanol Production.

Our ethanol production segment includes the production of ethanol, distillers grains, Ultra-High Protein and renewable corn oil at eleven ethanol plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee.

Our ethanol production segment includes the production of ethanol, distillers grains, Ultra-High Protein and renewable corn oil at ten biorefineries in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee.

At capacity, our facilities are capable of processing approximately 310 million bushels of corn per year and producing approximately 903 million gallons of ethanol, 2.2 million tons of distillers grains and Ultra-High Protein, and 300 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel and renewable diesel.

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We believe that global demand for protein for human consumption will continue to rise, requiring larger amounts of high protein feed for animals and aquaculture.

Our transformation capitalizes on this market insight, in an effort to capture higher coproduct returns.

As part of our transformation to a value-added agricultural technology company, we began producing Ultra-High Protein using FQT's MSC TM technology in 2020 and are deploying this technology across various locations to help meet growing demand for protein feed ingredients and low-carbon renewable corn oil.

As of December 31, 2022, we have completed or began commissioning this technology at five of our locations.

Our transformation capitalizes on this market insight, in an effort to capture higher co-product returns.

As part of our transformation to a value-added agricultural technology company, we began producing Ultra-High Protein using FQT's MSC™ technology in 2020 and are deploying this technology across various locations to help meet growing demand for protein feed ingredients and low-carbon renewable corn oil.

As of December 31, 2023, we have installed and are operating FQT MSC™ technology at five of our biorefineries.

Installation at additional biorefineries is expected over the course of the next few years, both at our other locations and across the broader industry.

The biorefineries producing Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater and yeast concentrations of 25%, also increase

the production of renewable corn oil and produce other higher-value products, such as post-MSC distillers grains.

In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT's CST TM at commercial scale, which is expected to be operational in late 2023.

CST TM allows for the production of both food and industrial grade low-carbon glucose and dextrose at a dry mill ethanol plant to target applications in food production, renewable chemicals and synthetic biology.

We also anticipate modifying additional biorefineries to include CST TM production capabilities to meet anticipated future customer demands.

The biorefineries producing Ultra-

High Protein, a feed ingredient with protein concentrations of 50% or greater and yeast concentrations of 25%, also increase the production of renewable corn oil and produce other higher-value products, such as post-MSC distillers grains.

We successfully completed full scale 60% protein production runs using FQT's MSC™ system.

In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT's CST™ at commercial scale, which is expected to begin commissioning in the first quarter of 2024.

FQT CST™ allows for the production of both food and industrial grade low-carbon glucose and dextrose at a dry mill ethanol plant to target applications in food production, renewable chemicals and synthetic biology.

We also anticipate modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer demands.

Ethanol has become a valuable blend component that comprises approximately 10.1% of the domestic surface transportation gasoline supply with the potential to grow with higher blending rates.

Additionally, government incentives to produce SAF through ATJ pathways could provide additional demand for low-CI ethanol for conversion to SAF.

In February and April 2021, as part of our carbon reduction strategy, we committed our Nebraska, Iowa and Minnesota plants to the Summit Carbon Solutions Midwest Carbon Express project to capture and store biogenic carbon dioxide produced through the fermentation process.

These eight biorefineries have entered into twelve-year carbon offtake agreements, which will lower GHG emissions through the capture of carbon dioxide at each of the biorefineries, significantly lowering their CI.

According to Summit Carbon Solutions, the anticipated completion date for this project is 2024.

In addition, we are exploring innovative options for carbon use, such as synthetic methane production, with global partners.

Reducing the CI of our fuel ethanol could allow us to benefit from state and federal clean fuel programs, including LCFS and federal tax credits under the Inflation Reduction Act, and could position our low-carbon ethanol as a potential feedstock for ATJ pathways to produce SAF.

SAF is a drop-in fuel, chemically identical to petroleum-based jet fuel and can be blended into the fuel supply at varying levels.

There is an increasing focus on using this fuel to reduce the carbon footprint of air travel.

SAF can be produced from vegetable and waste oil feedstocks, such as our renewable corn oil.

Additionally, ATJ technologies are emerging and being commercialized that use low-CI ethanol as a feedstock to produce SAF.

In January 2023, Green Plains, United Airlines and Tallgrass formed a joint venture, Blue Blade Energy, to develop and then commercialize a novel ATJ SAF technology.

As part of our carbon reduction strategy, we committed our seven biorefineries in Nebraska, Iowa and Minnesota to carbon capture and sequestration projects through carbon pipeline transport, four with Summit Carbon Solutions and our three Nebraska biorefineries with another provider, which will lower GHG emissions through the capture of carbon dioxide at each of these biorefineries, significantly lowering their CI.

We anticipate completion of our three Nebraska biorefinery carbon capture projects in 2025, and the Summit Carbon Solutions projects in 2026.

In addition, we are collaborating with global partners to explore innovative options for carbon use, such as synthetic methane production at Madison and Obion.

We intend to sequester the carbon from fermentation at Mount Vernon as well.

Reducing the CI of our fuel ethanol could allow us to benefit from state and federal clean fuel programs, including LCFS and federal tax credits under the IRA, and could position our low-carbon ethanol as a potential feedstock for ATJ pathways to produce SAF.

In July 2023, we announced a technology collaboration with Equilon Enterprises LLC, which allows us to use FQT’s precision separation and processing technology with Shell Fiber Conversion Technology.

The two technologies will combine fermentation, mechanical separation and processing, and fiber conversion into one platform.

This has the potential to create a new process to liberate all available distillers corn oil currently bound in the fiber fraction of the corn kernel, generate cellulosic sugars for production of low-carbon ethanol, and enhance and expand available high protein to produce high-quality ingredients for global animal feed diets.

Our collaboration is expected to complete the construction of a facility at Green Plains York and begin commissioning in early 2024.

Competitive Strengths

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Through our ownership of FQT and other partnerships, we are currently undergoing a number of initiatives to further improve margins.

Our transformation into a sustainable ingredient producer continues centering around FQT's MSC TM and CST TM technologies.

These technologies enhance our ability to produce value-added ingredients, while expanding renewable corn oil yields.

The acquisition of a majority interest in FQT secures additional intellectual property rights, including those aimed at developing and implementing proven, value-added agriculture, food and industrial biotechnology systems, CST TM and MSC TM .

Our transformation into a sustainable ingredient producer continues centering around FQT's MSC™ and CST™ technologies.

These technologies enhance our ability to produce value-added ingredients, while expanding renewable corn oil

FQT provides additional intellectual property rights, including those aimed at developing and implementing proven, value-added agriculture, food and industrial biotechnology systems, CST™ and MSC™.

We continue to evaluate additional technological opportunities to expand our capabilities and product offerings in the coming years.

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Additional information about these items can be found elsewhere in this report or in previous reports filed with the SEC.

New Financing to Replace Existing Working Capital Facilities

On March 25, 2022, Green Plains Finance Company, Green Plains Grain and Green Plains Trade, all of which are wholly owned subsidiaries , 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 led by ING Capital LLC (“ING”) as Agent and ING, PNC Capital Markets LLC, Fifth Third Bank, National Association, Bank of America, N.A.

and BMO Harris Bank, N.A., as Joint Lead Arrangers.

This transaction refinanced the separate credit facilities previously held by Green Plains Grain and Green Plains Trade.

The Facility matures on March 25, 2027.

See further discussions in Note 12 - Debt of the financial statements.

Convertible Notes Conversion into Common Stock

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

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 Senior Notes were converted into approximately 4.3 million shares of common stock.

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

See further discussions in Note 12 - Debt of the financial statements.

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

Additionally, on September 1, 2022, the scheduled maturity of the 4.125% notes, approximately $1.7 million aggregate principal amount was settled through a combination of $1.7 million in cash and approximately 15 thousand shares of our common stock.

The remaining $23 thousand aggregate principal amount of the 4.125% notes and accrued interest were settled in cash.

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

See further discussions in Note 12 - Debt of the financial statements.

Strategic Review

The Board of Directors is initiating a formal review process to evaluate strategic alternatives for the company.

This comprehensive evaluation is intended to explore a broad range of opportunities for the company to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or sale, partnerships and financings.

There is no deadline or definitive timetable for completion of the strategic review process, and there can be no assurances that the process will result in a transaction or any other outcome.

We do not intend to make any further public comment regarding the review until the Board has approved a specific action or otherwise determines that additional disclosure is appropriate or required.

Cooperation Agreement

On February 6, 2024, we entered into a Cooperation Agreement with a large shareholder whereby we agreed to announce our strategic review and the large shareholder agreed to certain standstill and voting obligations.

The Partnership Merger

On September 16, 2023, the company entered into a Merger Agreement to acquire all of the publicly held common units of the partnership not already owned by the company and its affiliates.

On January 9, 2024, the transactions contemplated by the Merger Agreement were completed.

Refer to Note 5 - Merger and Dispositions included in the notes to the audited consolidated financial statements included herein for more information.

Disposition of Atkinson Ethanol Plant

On September 7, 2023, we completed the disposition of our Atkinson ethanol plant and sale of certain related assets and transfer of certain related liabilities.

The divested assets were reported within our ethanol production, agribusiness and energy services and partnership segments.

The company recorded a pretax gain on the sale of the Atkinson plant of $4.1 million recorded within corporate activities.

Refer to Note 5 - Merger and Dispositions included in the notes to the audited consolidated financial statements included herein for more information.

Wood River Incident

On April 17, 2023, during routine maintenance on a whole stillage tank, we experienced an explosion at our Wood River, Nebraska facility.

There was an operating loss of approximately $9.5 million in 2023 related to this incident, after insurance proceeds.

Operating Segments

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Ethanol, also known as ethyl alcohol or grain alcohol, is a colorless liquid produced by fermenting carbohydrates found in a number of different types of grains, such as corn, wheat and sorghum, and other cellulosic matter found in plants.

Most of the ethanol produced in the United States is made from corn, which can be handled efficiently and is

in greater supply than other grains.

Most of the ethanol produced in the United States is made from corn, which can be handled efficiently and is in greater supply than other grains.

Corn contains large quantities of carbohydrates that convert into glucose more easily than most other kinds of biomass.

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Ethanol Plants.

We operate eleven ethanol plants, located in six states, that produce ethanol, distillers grains, Ultra-High Protein and renewable corn oil.

Plant Location Initial Operation or

Acquisition Date Technology Plant Production

We operate ten ethanol plants, located in six states, that produce ethanol, distillers grains, Ultra-High Protein and renewable corn oil.

Plant Location Plant Production

Capacity (mmgy)

Atkinson, Nebraska June 2013 Delta-T 55

Central City, Nebraska (1)

July 2009 ICM 116

Fairmont, Minnesota Nov.

2013 Delta-T / ICM 119

Madison, Illinois Sep.

2016 Vogelbusch 90

Fairmont, Minnesota 119

Madison, Illinois 90

Mount Vernon, Indiana (1)

2016 Vogelbusch 90

Obion, Tennessee (1)

Otter Tail, Minnesota Mar.

2011 Delta-T / ICM 55

Otter Tail, Minnesota 55

Shenandoah, Iowa (1)

Superior, Iowa

July 2008 Delta-T / ICM 60

Wood River, Nebraska (1)

2013 Delta-T / ICM 121

York, Nebraska Sep.

2016 Vogelbusch 50

(1) We constructed these three plants;

all other ethanol plants were acquired.

(2) Also produces Ultra-High Protein.

York, Nebraska 50

(1) Produces Ultra-High Protein.

Our business is directly affected by the supply and demand for ethanol and other fuels in the markets served by our assets.

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We use cash and forward purchase contracts with grain producers and elevators to buy corn.

We maintain direct relationships with local farmers, grain elevators and cooperatives, which serve as our primary sources of grain feedstock, at nine of our ethanol plants.

We maintain direct relationships with local farmers, grain elevators and cooperatives, which serve as our primary sources of grain feedstock for all ten of our ethanol plants.

This allows us to purchase much of the corn we need directly from farmers throughout the year.

At two of our ethanol plants, we contract with a third-party grain originator to supply the corn necessary for ethanol production.

We intend to assume the responsibility for grain origination at these two locations after the existing contracts expire in November 2023.

Each of our plants is also situated on rail lines or has other logistical solutions to access corn supplies from other regions of the country should local supplies become insufficient.

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Ultra-High Protein is corn fermented protein produced by further processing of the spent grain mash from the beer column.

The spent grain is processed using FQT’s MSC TM technology, which contains a series of screening equipment to remove fiber from the spent grain which is sent to the distillers grain dryer.

The remaining product is washed and clarified into a wet protein stream which is dried in a ring dryer to produce Ultra-High Protein meal.

The product typically has protein concentration of 50% or greater and yields of approximately 3.8 pounds per bushel have been achieved.

The spent grain is processed using FQT’s MSC™ technology, which contains a series of screening equipment to remove fiber from the spent grain which is sent to the distillers grain dryer.

The remaining product is washed and clarified into a wet protein stream which is dried in a ring dryer to produce Ultra-High Protein meal with protein concentrations of 50% or greater.

Renewable Corn Oil.

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The centrifuges separate the relatively light renewable corn oil from the heavier components of the syrup.

We extract on average approximately 0.9 pounds of renewable corn oil per bushel of corn used to produce ethanol.

For our locations that have deployed FQT’s MSC™ technology, we have achieved renewable corn oil yields of 1.1 pounds of renewable corn oil per bushel and anticipate similar yields as we deploy FQT’s MSC™ technology across our platform.

Industrial uses for renewable corn oil include feedstock for renewable diesel, biodiesel and livestock feed additives.

The syrup is blended into wet, modified wet or dried distillers grains.

Across our entire platform, we extract on average approximately 1.0 pound of renewable corn oil per bushel of corn used to produce ethanol.

Industrial uses for renewable corn oil are primarily as a feedstock for renewable diesel and biodiesel.

Additionally, it is also used as a livestock feed additive.

Natural Gas .

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(thousands of bushels)

Atkinson, Nebraska 5,109

Central City, Nebraska 1,400

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Under these agreements, ethanol is priced under both fixed and indexed pricing arrangements.

We market distillers grains to local, national and international markets through Green Plains Trade.

The bulk of our demand is delivered to geographic regions that do not have significant local corn or distillers grains production.

We market distillers grains and high protein ingredients to local, domestic and international markets through Green Plains Trade.

The bulk of our demand is delivered to geographic regions that do not have significant local corn, distillers grains or high protein ingredients production.

We sell to international markets indirectly through exporters.

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Partnership Segment

Our partnership segment provides fuel storage and transportation services through (i) 27 ethanol storage facilities located at or near our eleven ethanol plants, (ii) two fuel terminal facilities located near major rail lines, and (iii) a leased railcar fleet and other transportation assets.

Our partnership segment provides fuel storage and transportation services through (i) 24 ethanol storage facilities located at or near our ten ethanol plants, (ii) two fuel terminal facilities located near major rail lines, and (iii) a leased railcar fleet and other transportation assets.

Transportation and Delivery.

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The partnership owns and operates fuel terminals at two locations in two states with combined storage capacity of approximately 6.7 mmg and throughput capacity of approximately 480 mmgy.

We also have 27 ethanol storage facilities located at or near our eleven ethanol plants with a combined storage capacity of approximately 25.1 mmg to support current ethanol production capacity of approximately 958 mmgy.

We also have 24 ethanol storage facilities located at or near our ten ethanol plants with a combined storage capacity of approxima tely 23.1 mm g to support current ethanol production capacity of approximately 903 mmgy.

Facility Location Storage Capacity

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Ethanol Plants

Atkinson, Nebraska (1)

Central City, Nebraska 2,250

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York, Nebraska 1,100

(1) The ethanol storage facility is located approximately 16 miles from the ethanol plant.

For more information about our segments, refer to Item 7.

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Ethanol production technologies also continue to evolve.

We expect changes to occur primarily in the area of cellulosic ethanol, which is made from biomass such as switch grass or fast-growing poplar trees, or from biodigesters at landfills or livestock production facilities.

We anticipate changes could occur primarily in the area of cellulosic ethanol, or from biodigesters at landfills or livestock production facilities.

Since all of our plants are designed as single-feedstock facilities, adapting our plants for a different feedstock or process system would require additional capital investments and retooling which could be cost prohibitive, and would require new RFS pathways to be approved by the EPA.

Our distillers grains and high protein feed ingredients compete against other feed ingredients including soybean meal, canola meal, ground corn, corn gluten meal and distillers grains from other ethanol producers domestically and abroad.

Our distillers corn oil competes against vegetable oils such as soybean oil, canola oil, and to some extent palm oil, as well as waste feedstocks including used cooking oil, animal fats and tallow.

Regulatory Matters

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Refer to Item 7.

- Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for detailed discussion of these topics.

- Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for a detailed discussion of these topics.

Environmental and Other Regulation

Our ethanol production, agribusiness and energy services, and partnership segment activities are subject to various and extensive environmental and other regulations.

We obtain and maintain various environmental permits to operate our plants and other facilities.

Ethanol production involves the emission of various airborne pollutants, including particulate, carbon dioxide, oxides of nitrogen, hazardous air pollutants and volatile organic compounds.

While all eleven of our plants have grandfathered pathways allowing them to operate under their current authorized capacity under the RFS mandate, operating above these capacities requires an Efficient Producer Pathway and a 20% reduction in GHG emissions from a 2005 baseline.

Four of our plants currently maintain Efficient Producer Pathways to operate at increased capacities.

CARB began implementation of the California LCFS in 2011, which aims to decrease the CI of transportation fuel in the state.

In 2018, CARB strengthened GHG benchmarks to 20% reduction vs 1990 levels by 2030.

The most recent Scoping Plan from CARB in 2022 sets a target of 85% GHG reductions vs 1990 levels no later than 2045.

We employ maintenance and operations personnel at each of our plants.

In addition to the attention we place on the

health and safety of our employees, the operations of our facilities are regulated by the Occupational Safety and Health Administration.

Exclusive Partnerships and Joint Ventures

In 2021, we formed a 50/50 JV with Tharaldson Ethanol, which will own the MSC™ technology assets added adjacent to the Tharaldson Ethanol plant in North Dakota to produce Ultra-High Protein and increase renewable corn oil yields.

We anticipate these assets will be operational in early 2024.

In 2020, we acquired a majority interest in FQT.

The acquisition capitalized on the core strengths of each company to develop and implement proven, value-added agriculture, food and industrial biotechnology systems and rapidly expand installation and production of FQT’s MSC™ and CST TM technology at certain locations across our platform, as well as offer certain of these technologies to partnering biofuel facilities.

Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol, crude oil and other liquid hydrocarbon materials.

Compliance with existing and anticipated environmental laws and regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate and upgrade equipment and facilities.

Our business may also be impacted by government policies, such as tariffs, duties, subsidies, import and export restrictions and outright embargos.

We employ maintenance and operations personnel at each of our facilities, which are regulated by the Occupational Safety and Health Administration.

ethanol industry relies heavily on tank cars to deliver its product to market.

In 2015, the DOT finalized the Enhanced Tank Car Standard and Operational Controls for High-Hazard and Flammable Trains, or DOT specification 117, which established a schedule to retrofit or replace older tank cars that carry crude oil and ethanol, braking standards intended to reduce the severity of accidents and new operational protocols.

The rule has increased the lease costs for railcars in the short term and may increase the lease costs long term.

Our partnership's fleet is DOT 117 compliant.

Human Capital Resources

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We take workplace safety very seriously and our robust safety program means that we are constantly evaluating our safety protocols in an effort to keep our facilities safe for our workers.

We continue to monitor the impact of the COVID-19 pandemic on our teammates and within our operations, and proactively modify or adopt new practices to promote their health and safety.

We continue to monitor the impact of the COVID-19 pandemic, including resurgences and variants of the virus, on our teammates and within our operations, and proactively modify or adopt new practices to promote their health and safety.

Compensation and Benefits

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

What changed 10-K

Item 1. Business