Company Quick10K Filing
Green Plains Partners
Price1.00 EPS-31,089,000
Shares-0 P/E-0
MCap-0 P/FCF-0
Net Debt139 EBIT38
TEV139 TEV/EBIT4
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-02-20
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-06
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-20
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-07
10-K 2017-12-31 Filed 2018-02-14
10-Q 2017-09-30 Filed 2017-11-02
10-Q 2017-06-30 Filed 2017-08-03
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-22
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-02-18
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-12
8-K 2020-05-04 Earnings, Exhibits
8-K 2020-04-16 Other Events, Exhibits
8-K 2020-03-18 Officers, Exhibits
8-K 2020-02-10 Earnings, Exhibits
8-K 2020-01-16 Other Events, Exhibits
8-K 2019-11-05 Earnings, Exhibits
8-K 2019-10-17
8-K 2019-08-05 Earnings, Exhibits
8-K 2019-07-18 Exhibits
8-K 2019-05-08 Officers, Regulation FD, Exhibits
8-K 2019-05-08 Earnings, Exhibits
8-K 2019-04-18 Exhibits
8-K 2019-02-11 Earnings, Exhibits
8-K 2019-01-17 Exhibits
8-K 2018-11-30 Officers
8-K 2018-11-15 Enter Agreement, M&A, Regulation FD, Exhibits
8-K 2018-11-07 Earnings, Exhibits
8-K 2018-10-18 Exhibits
8-K 2018-10-15 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-10-10 Enter Agreement, Exhibits
8-K 2018-08-01 Earnings, Exhibits
8-K 2018-08-01 Leave Agreement
8-K 2018-07-19 Other Events, Exhibits
8-K 2018-07-16 Officers, Exhibits
8-K 2018-05-07 Earnings, Exhibits
8-K 2018-04-19 Other Events, Exhibits
8-K 2018-03-19 Officers
8-K 2018-02-16 Enter Agreement, Off-BS Arrangement, Regulation FD, Exhibits
8-K 2018-02-07 Earnings, Exhibits
8-K 2018-01-18 Other Events, Exhibits

GPP 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 gpp-20200331xex31_1.htm
EX-31.2 gpp-20200331xex31_2.htm
EX-32.1 gpp-20200331xex32_1.htm
EX-32.2 gpp-20200331xex32_2.htm

Green Plains Partners Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
12585455-35-752013201520172020
Assets, Equity
30241812602013201520172020
Rev, G Profit, Net Income
75417-27-61-952013201520172020
Ops, Inv, Fin

gpp-20200331x10q
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extr

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2020

Commission File Number 001-37469

Green Plains PARTNERS LP

(Exact name of registrant as specified in its charter)

Delaware

47-3822258

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1811 Aksarben Drive, Omaha, NE 68106

(402) 884-8700

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Units, Representing Limited Partner Interests

GPP

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o

Accelerated Filer x

Non-Accelerated Filer ¨

Smaller Reporting Company o

Emerging Growth Company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes x No

The registrant had 23,160,551 common units outstanding as of May 1, 2020.


TABLE OF CONTENTS

 

2


Commonly Used Defined Terms

The abbreviations, acronyms and industry terminology used in this quarterly report are defined as follows:

Green Plains Partners LP, Subsidiaries, and Partners:

z

Green Plains Operating Company

Green Plains Operating Company LLC

Green Plains Partners; the partnership

Green Plains Partners LP and its subsidiaries

NLR

NLR Energy Logistics LLC

Green Plains Inc. and Subsidiaries:

Green Plains; the parent or sponsor

Green Plains Inc. and its subsidiaries

Green Plains Holdings, the general partner

Green Plains Holdings LLC

Green Plains Trade

Green Plains Trade Group LLC

Other Defined Terms:

2019 annual report

The partnership’s annual report on Form 10-K for the year ended December 31, 2019, filed February 20, 2020

ARO

Asset retirement obligation

ASC

Accounting Standards Codification

Bgy

Billion gallons per year

CAFE

Corporate Average Fuel Economy

CAMEX

Brazil Chamber of Foreign Trade

Conflicts committee

The partnership’s committee responsible for reviewing situations involving certain transactions with affiliates or other potential conflicts of interest

COVID-19

Coronavirus Disease 2019

D.C.

District of Columbia

E10

Gasoline blended with up to 10% ethanol by volume

E15

Gasoline blended with up to 15% ethanol by volume

E85

Gasoline blended with up to 85% ethanol by volume

EBITDA

Earnings before interest, taxes, depreciation and amortization

EIA

U.S. Energy Information Administration

EPA

U.S. Environmental Protection Agency

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

Financial Accounting Standards Board

GAAP

U.S. Generally Accepted Accounting Principles

GATT

General Agreement on Tariffs and Trade

LIBOR

London Interbank Offered Rate

LTIP

Green Plains Partners LP 2015 Long-Term Incentive Plan

Mmg

Million gallons

MTBE

Methyl tertiary-butyl ether

MVCs

Minimum volume commitments

Partnership agreement

First Amended and Restated Agreement of Limited Partnership of Green Plains Partners LP, dated as of July 1, 2015, between Green Plains Holdings LLC and Green Plains Inc.

PCAOB

Public Company Accounting Oversight Board

RFS II

Renewable Fuels Standard II

RIN

Renewable identification number

RVO

Renewable volume obligation

SEC

Securities and Exchange Commission

USDA

U.S. Department of Agriculture

WTO

World Trade Organization


3


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

GREEN PLAINS PARTNERS LP

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit amounts)

March 31, 2020

December 31, 2019

(unaudited)

ASSETS

Current assets

Cash and cash equivalents

$

264

$

261

Accounts receivable

652

985

Accounts receivable from affiliates

15,440

15,666

Prepaid expenses and other

473

517

Total current assets

16,829

17,429

Property and equipment, net of accumulated depreciation and amortization of $32,937 and $31,976, respectively

36,805

37,355

Operating lease right-of-use assets

37,385

35,456

Goodwill

10,598

10,598

Investment in equity method investee

4,487

4,329

Other assets

304

486

Total assets

$

106,408

$

105,653

LIABILITIES AND PARTNERS' DEFICIT

Current liabilities

Accounts payable

$

6,846

$

5,050

Accounts payable to affiliates

460

543

Accrued and other liabilities

3,801

4,461

Asset retirement obligations

819

565

Operating lease current liabilities

12,899

13,093

Current maturities of long-term debt

130,200

132,100

Total current liabilities

155,025

155,812

Asset retirement obligations

2,654

2,500

Operating lease long-term liabilities

25,308

23,088

Total liabilities

182,987

181,400

Commitments and contingencies (Note 10)

 

 

Partners' deficit

Common unitholders - public (11,574,003 units issued and outstanding)

113,665

114,006

Common unitholders - Green Plains (11,586,548 units issued and outstanding)

(188,724)

(188,304)

General partner interests

(1,520)

(1,449)

Total partners' deficit

(76,579)

(75,747)

Total liabilities and partners' deficit

$

106,408

$

105,653

See accompanying notes to the consolidated financial statements.

4


GREEN PLAINS PARTNERS LP

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per unit amounts)

Three Months Ended
March 31,

2020

2019

Revenues

Affiliate

$

18,983

$

18,782

Non-affiliate

1,288

2,305

Total revenues

20,271

21,087

Operating expenses

Operations and maintenance (excluding depreciation and amortization reflected below)

6,160

6,865

General and administrative

1,044

1,117

Depreciation and amortization

961

985

Total operating expenses

8,165

8,967

Operating income

12,106

12,120

Other income (expense)

Interest income

-

20

Interest expense

(1,864)

(2,055)

Total other expense

(1,864)

(2,035)

Income before income taxes and income from equity method investee

10,242

10,085

Income tax expense

(31)

(52)

Income from equity method investee

158

215

Net income

$

10,369

$

10,248

Net income attributable to partners' ownership interests:

General partner

$

207

$

205

Limited partners - common unitholders

10,162

10,043

Earnings per limited partner unit (basic and diluted):

Common units

$

0.44

$

0.43

Weighted average limited partner units outstanding (basic and diluted):

Common units

23,138

23,119

See accompanying notes to the consolidated financial statements.

 

5


GREEN PLAINS PARTNERS LP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

Three Months Ended
March 31,

2020

2019

Cash flows from operating activities:

Net income

$

10,369

$

10,248

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation and amortization

961

985

Accretion

62

59

Amortization of debt issuance costs

233

204

Unit-based compensation

79

79

Income from equity method investee

(158)

(215)

Other

-

(22)

Changes in operating assets and liabilities:

Accounts receivable

333

(817)

Accounts receivable from affiliates

226

(4,749)

Prepaid expenses and other assets

44

23

Accounts payable and accrued liabilities

1,093

4,238

Accounts payable to affiliates

(83)

(159)

Operating lease liabilities and right-of-use assets

97

119

Other

5

11

Net cash provided by operating activities

13,261

10,004

Cash flows from investing activities:

Purchases of property and equipment

(22)

-

Net cash used in investing activities

(22)

-

Cash flows from financing activities:

Payments of distributions

(11,280)

(11,269)

Proceeds from revolving credit facility

22,200

30,600

Payments on revolving credit facility

(24,100)

(29,600)

Payments of loan fees

(56)

-

Net cash used in financing activities

(13,236)

(10,269)

Net change in cash and cash equivalents

3

(265)

Cash and cash equivalents, beginning of period

261

569

Cash and cash equivalents, end of period

$

264

$

304

Supplemental disclosures of cash flow

Cash paid for income taxes

$

78

$

126

Cash paid for interest

$

1,537

$

1,780

See accompanying notes to the consolidated financial statements.

6


GREEN PLAINS PARTNERS LP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

1. BASIS OF PRESENTATION, DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

References to “the partnership” in the consolidated financial statements and notes to the consolidated financial statements refer to Green Plains Partners LP and its subsidiaries.

Green Plains Holdings LLC, a wholly owned subsidiary of Green Plains Inc., serves as the general partner of the partnership. References to (i) “the general partner” and “Green Plains Holdings” refer to Green Plains Holdings LLC; (ii) “the parent,” “the sponsor” and “Green Plains” refer to Green Plains Inc.; and (iii) “Green Plains Trade” refers to Green Plains Trade Group LLC, a wholly owned subsidiary of Green Plains.

Consolidated Financial Statements

The consolidated financial statements include the accounts of the partnership and its controlled subsidiaries. All significant intercompany balances and transactions are eliminated on a consolidated basis for reporting purposes. Results for the interim periods presented are not necessarily indicative of the expected results for the entire year.

The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and 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, the consolidated financial statements should be read in conjunction with the partnership’s 2019 annual report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 20, 2020.

The partnership accounts for its interest in joint ventures using the equity method of accounting, with its investment recorded at the acquisition cost plus the partnership’s share of equity in undistributed earnings or losses and reduced by distributions received.

Use of Estimates in the Preparation of Consolidated Financial Statements

Preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the reporting period. The partnership bases its estimates on historical experience and assumptions it believes are proper and reasonable under the circumstances. The partnership regularly evaluates the appropriateness of these estimates and assumptions. Actual results could differ from those estimates. Key accounting policies, including, but not limited to, those related to revenue recognition, depreciation of property and equipment, asset retirement obligations, operating leases, and impairment of long-lived assets and goodwill, are impacted significantly by judgments, assumptions and estimates used to prepare the consolidated financial statements.

Description of Business

The partnership provides fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses. The partnership is its parent’s primary downstream logistics provider to support the parent’s approximately 1.1 bgy ethanol marketing and distribution business since the partnership’s assets are the principal method of storing and delivering the ethanol its parent produces. The ethanol produced by the parent is predominantly fuel grade, made principally from starch extracted from corn, and is primarily used for blending with gasoline. Ethanol currently comprises approximately 10% of the U.S. gasoline market and is an economical source of octane and oxygenates for blending into the fuel supply. The partnership does not take ownership of, or receive any payments based on the value of the ethanol, other fuels or products it handles. As a result, the partnership does not have any direct exposure to fluctuations in commodity prices.

7


Revenue Recognition

The partnership recognizes revenue when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the completion of services or the transfer of control of products to the customer or another specified third party. Operating lease revenue related to minimum volume commitments is recognized on a straight-line basis over the term of the lease. Under the terms of the storage and throughput agreement with Green Plains Trade, 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.

The partnership generates a substantial portion of its revenues under fee-based commercial agreements with Green Plains Trade. Please refer to Note 2 - Revenue to the consolidated financial statements for further details.

Operations and Maintenance Expenses

The partnership’s operations and maintenance expenses consist primarily of lease expenses related to the transportation assets, labor expenses, outside contractor expenses, insurance premiums, repairs and maintenance expenses, and utility costs. These expenses also include fees for certain management, maintenance and operational services to support the storage and terminal facilities, trucks, and leased railcar fleet allocated by Green Plains under the operational services and secondment agreement.

Concentrations of Credit Risk

In the normal course of business, the partnership is exposed to credit risk resulting from the possibility a loss may occur due to failure of another party to perform according to the terms of their contract. The partnership provides fuel storage and transportation services for various parties with a significant portion of its revenues earned from Green Plains Trade. The partnership continually monitors its credit risk exposure and concentrations. Please refer to Note 2 – Revenue and Note 11 – Related Party Transactions to the consolidated financial statements for additional information.

Segment Reporting

The partnership accounts for segment reporting in accordance with ASC 280, Segment Reporting, which establishes standards for entities reporting information about the operating segments and geographic areas in which they operate. Management evaluated how its chief operating decision maker has organized the partnership for purposes of making operating decisions and assessing performance, and concluded it has one reportable segment.

Asset Retirement Obligations

The partnership records an ARO for the fair value of the estimated costs to retire a tangible long-lived asset in the period incurred if it can be reasonably estimated, which is subsequently adjusted for accretion expense. Corresponding asset retirement costs are capitalized as a long-lived asset and depreciated on a straight-line basis over the asset’s remaining useful life. The expected present value technique used to calculate the fair value of the AROs includes assumptions about costs, settlement dates, interest accretion, and inflation. Changes in assumptions, such as the amount or timing of estimated cash flows, could increase or decrease the AROs. The partnership’s AROs are based on legal obligations to perform remedial activity related to land, machinery and equipment when certain operating leases expire. Please refer to Note 5 – Asset Retirement Obligations to the consolidated financial statements for additional information.

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2. REVENUE

Revenue Recognition

The partnership recognizes revenue when obligations under the terms of a contract with a customer are satisfied. Generally, this occurs with the completion of services or the transfer of control of products to the customer or another specified third party. Revenue is measured as the amount of consideration expected to be received in exchange for providing services.

Revenue by Source

The following table disaggregates our revenue by major source for the three months ended March 31, 2020 and 2019 (in thousands):

Three Months Ended
March 31,

2020

2019

Revenues

Service revenues

Terminal services

$

2,085

$

2,566

Trucking and other

1,168

895

Total service revenues

3,253

3,461

Leasing revenues (1)

Storage and throughput services

11,785

11,785

Railcar transportation services

5,124

5,619

Terminal services

109

222

Total leasing revenues

17,018

17,626

Total revenues

$

20,271

$

21,087

(1) Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, Revenue from Contracts with Customers, and are accounted for under ASC 842, Leases.

Terminal Services Revenue

The partnership provides terminal services and logistics solutions to Green Plains Trade, and other customers, through its fuel terminal facilities under various terminal service agreements, some of which have minimum volume commitments. Revenue generated by these terminals is disaggregated between service revenue and leasing revenue. If Green Plains, or other customers, fail to meet their minimum volume commitments during the applicable term, a deficiency payment equal to the deficient volume multiplied by the applicable fee will be charged. Deficiency payments related to the partnership’s terminal services revenue may not be utilized as credits toward future volumes. At terminals where customers have shared use of terminal and tank storage assets, revenue is generated from contracts with customers and accounted for as service revenue. This service revenue is recognized at the point in time when product is withdrawn from tank storage.

At terminals where a customer is predominantly provided exclusive use of the terminal or tank storage assets, the partnership is considered a lessor as part of an operating lease agreement. Revenue is recognized over the term of the lease based on the minimum volume commitment or total actual throughput if in excess of the minimum volume commitment.

Trucking and Other Revenue

The partnership transports ethanol, natural gasoline, other refined fuels and feedstocks by truck from identified receipt points to various delivery points. Trucking revenue is recognized over time based on the percentage of total miles traveled, which is on average less than 100 miles.

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Railcar Transportation Services Revenue

Under the rail transportation services agreement, Green Plains Trade is obligated to use the partnership to transport ethanol and other fuels from receipt points identified by Green Plains Trade to nominated delivery points. Green Plains Trade is required to pay the partnership fees for the minimum railcar volumetric capacity provided, regardless of utilization of that capacity. However, Green Plains Trade is not charged for railcar volumetric capacity that is not available for use due to inspections, upgrades or routine repairs and maintenance. Revenue associated with the rail transportation services fee is considered leasing revenue and is recognized over the term of the lease based on the actual average daily railcar volumetric capacity provided. The partnership may also charge Green Plains Trade a related services fee for logistical operations management of railcar volumetric capacity utilized by Green Plains Trade which is not provided by the partnership. Revenue associated with the related services fee is also considered leasing revenue and recognized over the term of the lease based on the average volumetric capacity for which services are provided.

Storage and Throughput Revenue

The partnership generates leasing revenue from its storage and throughput agreement with Green Plains Trade based on contractual rates charged for the handling, storage and throughput of ethanol. Under this agreement, Green Plains Trade is required to pay the partnership a fee for a minimum volume commitment regardless of the actual volume delivered. If Green Plains Trade fails to meet its minimum volume commitment during any quarter, the partnership will charge Green Plains Trade a deficiency payment equal to the deficient volume multiplied by the applicable fee. The deficiency payment may be applied as a credit toward volumes delivered by Green Plains Trade in excess of the minimum volume commitment during the following four quarters, after which time any unused credits will expire. Revenue is recognized over the term of the lease based on the minimum volume commitment or total actual throughput if in excess of the minimum volume commitment and no deficiency related credits are available for use.

Payment Terms

The partnership has standard payment terms, which vary depending on the nature of the services provided, with the majority of terms falling within 10 to 30 days after transfer of control or completion of services. Contracts generally do not include a significant financing component in instances where the timing of revenue recognition differs from the timing of invoicing.

Major Customers

Revenue from Green Plains Trade Group was $19.0 million and $18.8 million for the three months ended March 31, 2020 and 2019, respectively, which exceeds 10% of the partnership's total revenue.

Contract Liabilities

The partnership records unearned revenue when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of service and lease agreements. Unearned revenue from service agreements, which represents a contract liability, is recorded for fees that have been charged to the customer prior to the completion of performance obligations, and is generally recognized in the subsequent quarter.

The following table reflects the changes in our unearned revenue from service agreements, which is recorded in accrued and other liabilities on the consolidated balance sheets, for the three months ended March 31, 2020 (in thousands):

Amount

Balance at January 1, 2020

$

230

Revenue recognized included in beginning balance

(230)

Net additions

225

Balance at March 31, 2020

$

225

The partnership expects to recognize all of the unearned revenue associated with service agreements from contracts with customers as of March 31, 2020, in the subsequent quarter when the product is withdrawn from tank storage.

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3. GOODWILL

The partnership currently has one reporting unit, BlendStar, to which goodwill is assigned. The decline in the partnership’s stock price caused a decline in the partnership’s market capitalization during the three months ended March 31, 2020. As such, the partnership determined a triggering event had occurred that required an interim impairment assessment for its Blendstar reporting unit as of March 31, 2020. Significant assumptions inherent in the valuation methodologies for goodwill were employed and include, but are not limited to, market capitalization, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital. Based on the partnership’s quantitative evaluation, it was determined that the fair value of the Blendstar reporting unit exceeded its carrying value. As a result, the partnership concluded that the goodwill assigned to the Blendstar reporting unit was not impaired, but could be at risk of future impairment. The partnership continues to believe that its long-term financial goals will be achieved. As a result of the analysis, the partnership did not record a goodwill impairment charge as of March 31, 2020.

4. DEBT

Revolving Credit Facility

Green Plains Operating Company has a $200.0 million revolving credit facility, which matures on July 1, 2020, to fund working capital, acquisitions, distributions, capital expenditures and other general partnership purposes. Advances under the credit facility are subject to a floating interest rate based on the preceding fiscal quarter’s consolidated leverage ratio at a base rate plus 1.25% to 2.00%, or LIBOR plus 2.25% to 3.00%. The unused portion of the credit facility is also subject to a commitment fee of 0.35% to 0.50%, depending on the preceding fiscal quarter’s consolidated leverage ratio.

The revolving credit facility is available for revolving loans, including sublimits of $30.0 million for swing line loans and $30.0 million for letters of credit. The revolving credit facility is guaranteed by the partnership, each of its existing subsidiaries, and any potential future domestic subsidiaries. As of March 31, 2020, the revolving credit facility had an average interest rate of 3.95%.

The partnership’s obligations under the credit facility are secured by a first priority lien on (i) the capital stock 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, and (iii) all proceeds and products of the equity interests of the partnership’s present and future subsidiaries and its personal 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 credit facility also requires the partnership to maintain a maximum consolidated net leverage ratio of no more than 3.50x and a minimum consolidated interest coverage ratio of no less than 2.75x, each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period. The consolidated leverage ratio is calculated by dividing total funded indebtedness minus the lesser of cash in excess of $5.0 million or $30.0 million by the sum of the four preceding fiscal quarters’ consolidated EBITDA. The consolidated interest coverage ratio is calculated by dividing the sum of the four preceding fiscal quarters’ consolidated EBITDA by the sum of the four preceding fiscal quarters’ interest charges.

The partnership is required to file a Form of Compliance Certificate attesting to its compliance under the revolving credit facility each quarter by the earlier of 45 days from the end of each such quarter or within 5 days of the SEC filing for such quarter or with respect to each fiscal year, the earlier of 90 days from the end of such fiscal year or within 15 days of the SEC filing for such fiscal year. As of March 31, 2020, the partnership was in full compliance with all covenants, and will report a consolidated leverage ratio of 2.47x and a consolidated interest coverage ratio of 6.49x.

The partnership had $130.2 million and $132.1 million of borrowings outstanding under the revolving credit facility as of March 31, 2020, and December 31, 2019, respectively. The partnership believes the carrying amount of its debt approximated fair value at both March 31, 2020 and December 31, 2019.

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The revolving credit facility, which is provided by a syndicate of financial institutions, will mature on July 1, 2020 unless extended by agreement of the lenders or replaced by another funding source. The partnership is currently working with its existing lender group to extend the credit facility. While the partnership has not formalized the credit facility or secured additional funding necessary to repay the loan, the partnership believes it is probable that it will source appropriate funding given the partnership’s consistent and stable fee-based cash flows, ongoing profitability, low debt leverage and history of obtaining financing on reasonable commercial terms. In the unlikely scenario that the partnership is unable to refinance its debt with the lenders, the partnership will consider other financing sources, including but not limited to, the restructuring or issuance of new debt with a different lending group, the issuance of additional common units, or other measures.

Covenant Compliance

The partnership, including all of its subsidiaries, was in compliance with its debt covenants as of March 31, 2020.

5. ASSET RETIREMENT OBLIGATIONS

Under various lease agreements, the partnership has AROs when certain machinery and equipment are disposed or operating leases expire. During the three months ended March 31, 2020, the partnership reassessed the estimated cost of AROs related to its railcar operating leases. The reassessment resulted in a change in estimated costs that has been reflected as an increase of $0.3 million to the AROs and corresponding long-lived assets on the consolidated balance sheet as of March 31, 2020.

The following table summarizes the change in the liability for the AROs during the three months ended March 31, 2020 (in thousands):