Green Plains Inc. [GPRE] Filings

10-Q 1 gpre-20240630.htm 10-Q gpre-20240630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission File Number 001-32924

GREEN PLAINS INC.

(Exact name of registrant as specified in its charter)


Iowa			84-1652107
(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

Name of each exchange on which registered

Common Stock, par value $0.001 per share

GPRE

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.

☒ 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).

☒ Yes ☐ 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

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

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

☐ Yes ☒ No

The registrant had 64,655,091 common stock outstanding as of August 2, 2024.

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TABLE OF CONTENTS


		Page
Commonly Used Defined Terms		3
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	5

	Consolidated Balance Sheets	5

	Consolidated Statements of Operations	6

	Consolidated Statements of Comprehensive Income (Loss)	7

	Consolidated Statements of Cash Flows	8

	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47

Item 4.	Controls and Procedures	49


PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	50

Item 1A.	Risk Factors	50

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50

Item 3.	Defaults Upon Senior Securities	50

Item 4.	Mine Safety Disclosures	50

Item 5.	Other Information	50

Item 6.	Exhibits	51

Signatures

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Commonly Used Defined Terms

Green Plains Inc. and Subsidiaries:


Green Plains Inc.; Green Plains; the company			Green Plains Inc. and its subsidiaries
FQT			Fluid Quip Technologies, LLC
Green Plains Commodity Management			Green Plains Commodity Management LLC
Green Plains Finance Company			Green Plains Finance Company LLC
Green Plains Grain			Green Plains Grain Company LLC
Green Plains Mount Vernon; Mount Vernon			Green Plains Mount Vernon LLC
Green Plains Obion; Obion			Green Plains Obion LLC
Green Plains Partners; the partnership			Green Plains Partners LP
Green Plains Shenandoah; Shenandoah			Green Plains Shenandoah LLC
Green Plains Trade			Green Plains Trade Group LLC
Green Plains Wood River; Wood River			Green Plains Wood River LLC

Accounting Defined Terms:


ASC			Accounting Standards Codification
EBITDA			Earnings before interest expense, income taxes, depreciation and amortization
EPS			Earnings per share
Exchange Act			Securities Exchange Act of 1934, as amended
GAAP			U.S. Generally Accepted Accounting Principles
SEC			Securities and Exchange Commission
SOFR			Secured Overnight Financing Rate

Industry and Other Defined Terms:


ATJ			Alcohol-to-Jet
BlackRock			Funds and accounts managed by BlackRock
the CARES Act			Coronavirus Aid, Relief, and Economic Security Act
CI			Carbon Intensity
COVID-19			Coronavirus Disease 2019
CST™			Clean Sugar Technology™ developed by Fluid Quip Technologies, LLC
DOE			Department of Energy
E10			Gasoline blended with up to 10% ethanol by volume
E15			Gasoline blended with up to 15% ethanol by volume
EIA			U.S. Energy Information Administration
EPA			U.S. Environmental Protection Agency
EV			Electric Vehicle
FFV			Flexible-fuel vehicle
GHG			Greenhouse gas
GP Turnkey Tharaldson			GP Turnkey Tharaldson LLC
IRA			Inflation Reduction Act
LCFS			Low Carbon Fuel Standard
Merger			Merger of GPLP Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of GPLP Holdings Inc., a wholly owned subsidiary of Green Plains (“Holdings”), with and into the partnership, with the partnership surviving such merger
Merger Agreement			Certain Agreement and Plan of Merger, dated as of September 16, 2023, by and among Green Plains Inc., Holdings, GPLP Merger Sub LLC, a wholly owned subsidiary of Holdings, Green Plains Partners LP, and Green Plains Holdings LLC, the general partner of the partnership (the "General Partner")
MmBtu			Million British Thermal Units
Mmg			Million gallons
MSC™			Maximized Stillage Coproducts™ technology developed by Fluid Quip Technologies, LLC
MTBE			Methyl tertiary-butyl ether

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RFS			Renewable Fuels Standard
RIN			Renewable identification number
RVO			Renewable volume obligation
SAF			Sustainable Aviation Fuel
Sequence™			A foundational feed ingredient made from a combination of corn and yeast protein, concentrated at 60%
SRE			Small refinery exemption
U.S.			United States
USDA			U.S. Department of Agriculture

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PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements.

GREEN PLAINS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	June 30, 2024		December 31, 2023
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	195,554	$	349,574
Restricted cash	29,540		29,188
Accounts receivable, net of allowances of $293 and $85, respectively	99,067		94,446
Income taxes receivable	1,072		822
Inventories	187,983		215,810
Prepaid expenses and other	20,957		23,118
Derivative financial instruments	17,647		19,772
Total current assets	551,820		732,730
Property and equipment, net of accumulated depreciation and amortization of $721,119 and $686,077, respectively	1,019,359		1,021,928
Operating lease right-of-use assets	73,077		73,993
Other assets	119,344		110,671
Total assets	$	1,763,600	$	1,939,322

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	109,329	$	186,643
Accrued and other liabilities	52,080		57,029
Derivative financial instruments	16,783		10,577
Operating lease current liabilities	23,863		22,908
Short-term notes payable and other borrowings	124,579		105,973
Current maturities of long-term debt	1,830		1,832
Total current liabilities	328,464		384,962
Long-term debt	483,773		491,918
Operating lease long-term liabilities	52,071		53,879
Other liabilities	18,431		18,507
Total liabilities	882,739		949,266

Commitments and contingencies (Note 13)

Stockholders' equity
Common stock, $0.001 par value; 150,000,000 shares authorized; 67,460,745 and 62,326,622 shares issued, and 64,655,686 and 59,521,563 shares outstanding, respectively	67		62
Additional paid-in capital	1,212,845		1,113,806
Retained deficit	(311,563)		(235,801)
Accumulated other comprehensive loss	(2,807)		(3,160)
Treasury stock, 2,805,059 shares	(31,174)		(31,174)
Total Green Plains stockholders' equity	867,368		843,733
Noncontrolling interests	13,493		146,323
Total stockholders' equity	880,861		990,056
Total liabilities and stockholders' equity	$	1,763,600	$	1,939,322

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Revenues	$	618,825	$	857,632	$	1,216,039	$	1,690,581

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)	581,002		842,161		1,169,849		1,674,419
Selling, general and administrative expenses	33,950		33,325		65,719		65,170
Depreciation and amortization expenses	21,584		24,626		43,071		50,012
Total costs and expenses	636,536		900,112		1,278,639		1,789,601
Operating loss	(17,711)		(42,480)		(62,600)		(99,020)

Other income (expense)
Interest income	1,490		2,771		4,000		5,936
Interest expense	(7,494)		(9,741)		(15,280)		(19,479)
Other, net	345		(161)		794		28
Total other income (expense)	(5,659)		(7,131)		(10,486)		(13,515)
Loss before income taxes and (loss) income from equity method investees	(23,370)		(49,611)		(73,086)		(112,535)
Income tax benefit (expense)	273		1,019		(56)		(2,410)
(Loss) income from equity method investees	(941)		272		(2,018)		376
Net loss	(24,038)		(48,320)		(75,160)		(114,569)
Net income attributable to noncontrolling interests	312		4,284		602		8,359
Net loss attributable to Green Plains	$	(24,350)	$	(52,604)	$	(75,762)	$	(122,928)

Earnings per share
Net loss attributable to Green Plains - basic and diluted	$	(0.38)	$	(0.89)	$	(1.19)	$	(2.09)

Weighted average shares outstanding
Basic and diluted	63,933		58,874		63,637		58,714

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited and in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(24,038)	$	(48,320)	$	(75,160)	$	(114,569)
Other comprehensive income, net of tax
Unrealized (losses) gains on derivatives arising during the period, net of tax benefit (expense) of $206, ($222), $2,122 and $3,801, respectively	(657)		710		(6,700)		(12,078)
Reclassification of realized losses on derivatives, net of tax benefit of ($550), ($1,134), ($2,232) and ($1,669), respectively	1,748		3,602		7,053		5,303
Total other comprehensive income (loss), net of tax	1,091		4,312		353		(6,775)
Comprehensive income (loss)	(22,947)		(44,008)		(74,807)		(121,344)
Comprehensive income attributable to noncontrolling interests	312		4,284		602		8,359
Comprehensive loss attributable to Green Plains	$	(23,259)	$	(48,292)	$	(75,409)	$	(129,703)

See accompanying notes to the consolidated financial statements.

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GREEN PLAINS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities
Net loss	$	(75,160)	$	(114,569)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	43,071		50,012
Amortization of debt issuance costs and non-cash interest expense	1,113		1,525
Inventory lower of cost or net realizable value adjustment	—		9,545
Deferred income taxes	(111)		2,131
Stock-based compensation	6,591		6,677
Loss (income) from equity method investees	2,018		(376)
Other	1,625		1,472
Changes in operating assets and liabilities
Accounts receivable	(4,829)		(23,850)
Inventories	27,827		9,947
Derivative financial instruments	8,795		5,121
Prepaid expenses and other assets	2,161		(750)
Accounts payable and accrued liabilities	(80,001)		(115,919)
Current income taxes	837		1,299
Other	346		(698)
Net cash used in operating activities	(65,717)		(168,433)

Cash flows from investing activities
Purchases of property and equipment, net	(39,484)		(48,902)
Investment in equity method investees	(16,023)		(8,696)
Net cash used in investing activities	(55,507)		(57,598)

Cash flows from financing activities
Payments of principal on long-term debt	(7,849)		(2,420)
Proceeds from short-term borrowings	338,384		761,455
Payments on short-term borrowings	(320,185)		(652,740)
Payments on extinguishment of non-controlling interest	(29,196)		—
Payments of transaction costs	(5,951)		—
Payments of dividends and distributions	—		(11,802)
Payments of loan fees	—		(16)
Payments related to tax withholdings for stock-based compensation	(4,587)		(8,938)
Other financing activities	(3,060)		—
Net cash provided by (used in) financing activities	(32,444)		85,539

Net change in cash and cash equivalents, and restricted cash	(153,668)		(140,492)
Cash and cash equivalents, and restricted cash, beginning of period	378,762		500,276
Cash and cash equivalents, and restricted cash, end of period	$	225,094	$	359,784

Continued on the following page

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GREEN PLAINS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)

Continued from the previous page


	Six Months Ended June 30,
	2024		2023
Reconciliation of total cash and cash equivalents, and restricted cash
Cash and cash equivalents	$	195,554	$	312,858
Restricted cash	29,540		46,926
Total cash and cash equivalents, and restricted cash	$	225,094	$	359,784

Supplemental disclosures of cash flow
Cash paid for income taxes, net	$	533	$	721
Cash paid for interest	$	14,452	$	17,717
Capital expenditures in accounts payable	$	6,292	$	5,979
Issuance of common stock as a result of the Merger	$	5	$	—
Non-cash extinguishment of non-controlling interest within additional paid-in capital	$	133,765	$	—
Non-cash ARO additions	$	1,037	$	2,930

See accompanying notes to the consolidated financial statements.

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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.

On January 9, 2024, the transactions contemplated by the Merger Agreement were completed and the company acquired all of the publicly held common units of the partnership not already owned by the company and its affiliates. Refer to Note 3 - Acquisition 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, 2023, filed with the SEC on February 9, 2024.

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.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications did not affect total revenues, costs and expenses or net income, but increased cost of goods sold and decreased gross margin, within the ethanol production segment. Costs historically reported as operations and maintenance expenses in the consolidated statements of operations are now being reported within cost of goods sold.

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 results could differ from those estimates. Certain accounting policies, including but not limited to those relating to 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 two operating segments: (1) ethanol production, which includes the production, storage and transportation of ethanol, distillers grains, Ultra-High Protein and renewable corn oil and (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.

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As a result of the Merger, the partnership's operations are included in the ethanol production operating segment.

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. To the degree these segregated balances are cash and cash equivalents, they are considered restricted cash on the consolidated balance sheets.

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 are recognized when control of the product is transferred to the customer, which depends on the agreed upon shipment or delivery terms.

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, plant overhead and transportation 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 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. Transportation costs include railcar leases, freight and shipping of the company's products, as well as storage costs incurred at destination terminals.

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,

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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.

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.

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.

Investments in Equity Method Investees

The company's equity method investments, which consist primarily of the company's 50% investment in GP Turnkey Tharaldson, including additional contributions during 2024, totaled $55.1 million and $41.7 million as of June 30, 2024 and December 31, 2023, respectively, and are reflected in other assets on the consolidated balance sheet. Interest capitalized related to our equity method investments for the six months ended June 30, 2024 totaled $0.8 million.

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2. REVENUE

Revenue by Source

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


	Three Months Ended June 30, 2024
	Ethanol Production		Agribusiness & Energy Services		Eliminations		Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol	$	—	$	—	$	—	$	—
Distillers grains	23,279		518		—		23,797
Renewable corn oil	—		—		—		—
Other	15,270		2,056		—		17,326
Intersegment revenues	1,179		75		(1,254)		—
Total revenues from contracts with customers	39,728		2,649		(1,254)		41,123
Revenues from contracts accounted for as derivatives under ASC 815 (1)
Ethanol	387,096		86,123		—		473,219
Distillers grains	63,845		5,563		—		69,408
Renewable corn oil	33,405		—		—		33,405
Other	1,369		301		—		1,670
Intersegment revenues	—		6,313		(6,313)		—
Total revenues from contracts accounted for as derivatives	485,715		98,300		(6,313)		577,702
Total Revenues	$	525,443	$	100,949	$	(7,567)	$	618,825


	Six Months Ended June 30, 2024
	Ethanol Production		Agribusiness & Energy Services		Eliminations		Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol	$	—	$	—	$	—	$	—
Distillers grains	48,079		518		—		48,597
Renewable corn oil	—		—		—		—
Other	29,617		4,468		—		34,085
Intersegment revenues	2,392		164		(2,556)		—
Total revenues from contracts with customers	80,088		5,150		(2,556)		82,682
Revenues from contracts accounted for as derivatives under ASC 815 (1)
Ethanol	737,208		159,498		—		896,706
Distillers grains	141,768		15,253		—		157,021
Renewable corn oil	67,565		—		—		67,565
Other	4,473		7,592		—		12,065
Intersegment revenues	—		12,452		(12,452)		—
Total revenues from contracts accounted for as derivatives	951,014		194,795		(12,452)		1,133,357
Total Revenues	$	1,031,102	$	199,945	$	(15,008)	$	1,216,039

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	Three Months Ended June 30, 2023
	Ethanol Production		Agribusiness & Energy Services		Eliminations		Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol	$	—	$	—	$	—	$	—
Distillers grains	20,027		—		—		20,027
Renewable corn oil	—		—		—		—
Other	9,473		1,822		—		11,295
Intersegment revenues	1,133		42		(1,175)		—
Total revenues from contracts with customers	30,633		1,864		(1,175)		31,322
Revenues from contracts accounted for as derivatives under ASC 815 (1)
Ethanol	551,388		118,487		—		669,875
Distillers grains	101,533		11,452		—		112,985
Renewable corn oil	37,725		5		—		37,730
Other	7,656		(1,936)		—		5,720
Intersegment revenues	—		5,951		(5,951)		—
Total revenues from contracts accounted for as derivatives	698,302		133,959		(5,951)		826,310
Total Revenues	$	728,935	$	135,823	$	(7,126)	$	857,632


	Six Months Ended June 30, 2023
	Ethanol Production		Agribusiness & Energy Services		Eliminations		Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol	$	—	$	—	$	—	$	—
Distillers grains	42,594		—		—		42,594
Renewable corn oil	—		—		—		—
Other	19,059		10,272		—		29,331
Intersegment revenues	2,238		94		(2,332)		—
Total revenues from contracts with customers	63,891		10,366		(2,332)		71,925
Revenues from contracts accounted for as derivatives under ASC 815 (1)
Ethanol	1,049,575		207,126		—		1,256,701
Distillers grains	215,901		22,815		—		238,716
Renewable corn oil	82,021		721		—		82,742
Other	15,265		25,232		—		40,497
Intersegment revenues	—		11,949		(11,949)		—
Total revenues from contracts accounted for as derivatives	1,362,762		267,843		(11,949)		1,618,656
Total Revenues	$	1,426,653	$	278,209	$	(14,281)	$	1,690,581

(1)Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC 606.

Major Customers

Revenues from Customer A represented 13% and 14% of total revenues for the three and six months ended June 30, 2024, respectively, and revenues from Customer B represented 10% of total revenues for the three months ended June 30, 2024, recorded within the ethanol production segment. For the three and six months ended June 30, 2023, Customer A represented 15% and 14% of total revenues, respectively, and revenues from Customer B represented 11% of total revenues for the three months ended June 30, 2023, recorded within the ethanol production segment.

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3. ACQUISITION

Green Plains Partners Merger

On January 9, 2024, the transactions contemplated by the Merger Agreement were completed and the company issued approximately 4.7 million shares of common stock to acquire all of the publicly held common units of the partnership not already owned by the company prior to the Merger at a fixed exchange ratio of 0.405 shares of the company's common stock, par value $0.001 per share, along with $2.50 of cash consideration for each partnership common unit. The total consideration as a result of the Merger was $143.1 million, which was comprised of $29.2 million in cash and $113.9 million of common stock exchanged. As a result of the Merger, the partnership's common units are no longer publicly traded.

The interests in the partnership owned by the company and its subsidiaries remain outstanding as limited partner interests in the surviving entity. The General Partner of the partnership will continue to own the non-economic general partner interest in the surviving entity.

Since the company controlled the partnership prior to the Merger and continues to control the partnership after the Merger, the company accounted for the change in its ownership interest in the partnership as an equity transaction during the six months ended June 30, 2024, which is reflected as a reduction of non-controlling interest with a corresponding increase to common stock and additional paid-in capital. No gain or loss was recognized in the consolidated statements of operations as a result of the Merger.

Prior to the effective time of the Merger on January 9, 2024, public unitholders owned a 49.2% limited partner interest, the company owned a 48.8% limited partner interest and a 2.0% general partner interest in the partnership. The earnings of the partnership that were attributed to its common units held by the public for the year ended December 31, 2023 are reflected in net income attributable to non-controlling interest in the consolidated statements of operations. For the six months ended June 30, 2024, the non-controlling interest attributed to the partnership common units held by the public of $133.8 million were recorded as a reduction of non-controlling interest with a corresponding increase to additional paid-in capital.

The company incurred transaction costs of $5.5 million related to the Merger during the six months ended June 30, 2024 and $2.0 million during the year ended December 31, 2023. These costs were directly related to the Merger consisting primarily of financial advisory services, legal services and other professional fees, and were recorded as an offset to the issuance of common stock within additional paid-in capital.

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.

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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 June 30, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash and cash equivalents	$	195,554	$	—	$	195,554
Restricted cash	29,540		—		29,540
Inventories carried at market	—		17,083		17,083
Derivative financial instruments - assets	—		4,614		4,614
Total assets measured at fair value	$	225,094	$	21,697	$	246,791

Liabilities
Accounts payable (1)	$	—	$	30,144	$	30,144
Accrued and other liabilities (2)	—		3,337		3,337
Derivative financial instruments - liabilities	—		16,783		16,783
Other liabilities (2)	—		1,612		1,612
Total liabilities measured at fair value	$	—	$	51,876	$	51,876


	Fair Value Measurements at December 31, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash and cash equivalents	$	349,574	$	—	$	349,574
Restricted cash	29,188		—		29,188
Inventories carried at market	—		45,898		45,898
Derivative financial instruments - assets	—		13,311		13,311
Total assets measured at fair value	$	378,762	$	59,209	$	437,971

Liabilities
Accounts payable (1)	$	—	$	54,716	$	54,716
Accrued and other liabilities (2)	—		9,917		9,917
Derivative financial instruments - liabilities	—		10,577		10,577
Other liabilities (2)	—		659		659
Total liabilities measured at fair value	$	—	$	75,869	$	75,869

(1)Accounts payable is generally stated at historical amounts with the exception of $30.1 million and $54.7 million at June 30, 2024 and December 31, 2023, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the company has elected the fair value option.

(2)As of June 30, 2024 and December 31, 2023, respectively, accrued and other liabilities includes $3.3 million and $9.9 million and other liabilities includes $1.4 million and $0.7 million of consideration related to potential earn-out payments recorded at fair value.

As of June 30, 2024, the fair value of the company’s debt was approximately $561.8 million compared with a book value of $610.2 million. At December 31, 2023, the fair value of the company’s debt was approximately $585.0 million compared with a book value of $599.7 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 $99.1 million and $94.4 million at June 30, 2024 and December 31, 2023, respectively.

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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 two operating segments: (1) ethanol production, which includes the production, storage and transportation of ethanol, distillers grains, Ultra-High Protein and renewable corn oil and (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.

As a result of the Merger, the partnership's operations are included in the ethanol production operating segment. The following changes were made to the company's operating segments:

•The revenue and operating results from fuel storage and transportation services previously disclosed within the partnership segment are now included within the ethanol production segment.

•Intersegment activities between the partnership and Green Plains Trade associated with ethanol storage and transportation services previously treated like third-party transactions and eliminated on a consolidated level are now eliminated within the ethanol production segment.

Intersegment activities between the partnership and Green Plains Trade associated with terminal services transacted with the agribusiness and energy services segment will continue to be eliminated on a consolidated level.

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. 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues
Ethanol production
Revenues from external customers	$	524,264	$	727,802	$	1,028,710	$	1,424,415
Intersegment revenues	1,179		1,133		2,392		2,238
Total segment revenues	525,443		728,935		1,031,102		1,426,653
Agribusiness and energy services
Revenues from external customers	94,561		129,830		187,329		266,166
Intersegment revenues	6,388		5,993		12,616		12,043
Total segment revenues	100,949		135,823		199,945		278,209
Revenues including intersegment activity	626,392		864,758		1,231,047		1,704,862
Intersegment eliminations	(7,567)		(7,126)		(15,008)		(14,281)
	$	618,825	$	857,632	$	1,216,039	$	1,690,581

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Refer to Note 2 - Revenue, for further disaggregation of revenue by operating segment.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of goods sold
Ethanol production (1)	$	495,053	$	719,878	$	1,003,355	$	1,426,011
Agribusiness and energy services	93,516		129,409		181,502		262,689
Intersegment eliminations	(7,567)		(7,126)		(15,008)		(14,281)
	$	581,002	$	842,161	$	1,169,849	$	1,674,419


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Gross margin
Ethanol production (1)	$	30,390	$	9,057	$	27,747	$	642
Agribusiness and energy services	7,433		6,414		18,443		15,520
	$	37,823	$	15,471	$	46,190	$	16,162


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Depreciation and amortization
Ethanol production	$	20,544	$	23,253	$	41,078	$	47,007
Agribusiness and energy services	497		536		1,002		1,349
Corporate activities	543		837		991		1,656
	$	21,584	$	24,626	$	43,071	$	50,012


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating income (loss)
Ethanol production (2)	$	(2,213)	$	(25,139)	$	(35,866)	$	(67,089)
Agribusiness and energy services	2,166		2,173		8,170		6,299
Corporate activities	(17,664)		(19,514)		(34,904)		(38,230)
	$	(17,711)	$	(42,480)	$	(62,600)	$	(99,020)

(1)Costs historically reported as operations and maintenance expenses in the consolidated statements of operations are now being reported within cost of goods sold, resulting in increased cost of goods sold and decreased gross margin within the ethanol production segment.

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

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


	June 30, 2024		December 31, 2023
Total assets (1)
Ethanol production	$	1,295,412	$	1,275,562
Agribusiness and energy services	362,445		413,937
Corporate assets	109,982		254,300
Intersegment eliminations	(4,239)		(4,477)
	$	1,763,600	$	1,939,322

(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. Raw materials and finished goods inventories are valued under the first in, first out (FIFO) or weighted average cost method at the lower of average cost or net realizable value. The company recorded a $2.6 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 December 31, 2023.

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


	June 30, 2024		December 31, 2023
Finished goods	$	70,922	$	73,975
Commodities held for sale	17,083		45,898
Raw materials	32,751		32,820
Work-in-process	14,255		14,454
Supplies and parts	52,972		48,663
	$	187,983	$	215,810

7. DERIVATIVE FINANCIAL INSTRUMENTS

At June 30, 2024, the company’s consolidated balance sheet reflected unrealized losses of $2.8 million, net of tax, in accumulated other comprehensive loss. The company expects these items will be reclassified as operating loss over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating loss will differ as commodity prices change.

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
	June 30, 2024			December 31, 2023			June 30, 2024		December 31, 2023
Derivative financial instruments - forwards	$	4,614	(1)	$	13,311	(2)	$	16,783	$	10,577
Other liabilities	—			—			209		2
Total	$	4,614		$	13,311		$	16,992	$	10,579

(1)At June 30, 2024, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $13.0 million, which included $0.2 million of net unrealized losses on derivative financial instruments designated as

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cash flow hedging instruments, $0.8 million of unrealized gains on derivative financial instruments designated as fair value hedging instruments, and the balance representing economic hedges.

(2)At December 31, 2023, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange-traded futures and options contracts of $6.5 million, which include $0.7 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments, $0.7 million of unrealized gains 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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	$	—	$	(1,518)	$	3,736	$	(1,518)
Cost of goods sold	(2,298)		(3,218)		(13,021)		(5,454)
Net loss recognized in loss before income taxes	$	(2,298)	$	(4,736)	$	(9,285)	$	(6,972)


	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
Gain (Loss) Recognized in Other Comprehensive Income on Derivatives	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Commodity contracts	$	(863)	$	932	$	(8,822)	$	(15,879)

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 June 30,				Six Months Ended June 30,
		2024		2023		2024		2023
Exchange-traded futures and options	Revenues	$	(146)	$	(3,269)	$	(1,219)	$	(11,145)
Forwards	Revenues	(1,715)		3,967		(4,444)		4,626
Exchange-traded futures and options	Cost of goods sold	8,617		25,367		11,654		33,733
Forwards	Cost of goods sold	(9,559)		(32,713)		(6,691)		(32,287)
Net gain (loss) recognized in income (loss) before income taxes		$	(2,803)	$	(6,648)	$	(700)	$	(5,073)

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


	June 30, 2024				December 31, 2023
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 Liabilities		Carrying Amount of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
Inventories	$	17,083	$	(1,373)	$	45,898	$	(1,104)

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


	Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Three Months Ended June 30,
	2024				2023
	Revenue		Cost of Goods Sold		Revenue		Cost of Goods Sold
Loss on cash flow hedging relationships

Commodity contracts
Amount of loss on exchange-traded futures reclassified from accumulated other comprehensive income into income	$	—	$	(2,298)	$	(1,518)	$	(3,218)

Gain (loss) on fair value hedging relationships

Commodity contracts
Fair-value hedged inventories	—		1,014		—		(1,063)
Exchange-traded futures designated as hedging instruments	—		(2,858)		—		1,247
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	$	—	$	(4,142)	$	(1,518)	$	(3,034)

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	Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships for the Six Months Ended June 30,
	2024				2023
	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	$	3,736	$	(13,021)	$	(1,518)	$	(5,454)

Gain (loss) on fair value hedging relationships

Commodity contracts
Fair-value hedged inventories	—		(3,347)		—		(10,420)
Exchange-traded futures designated as hedging instruments	—		2,404		—		11,925
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	$	3,736	$	(13,964)	$	(1,518)	$	(3,949)

The notional volume of open commodity derivative positions as of June 30, 2024, are as follows (in thousands):

Exchange-Traded (1)

Non-Exchange-Traded (2)

Derivative
Instruments

Net Long &
(Short)

Long

(Short)

Unit of
Measure

Commodity

Futures

(18,380)

Bushels

Corn

Futures

12,300

(3)

Bushels

Corn

Futures

(660)

(4)

Bushels

Corn

Futures

(3,864)

Gallons

Ethanol

Futures

(34,230)

(3)

Gallons

Ethanol

Futures

(1,958)

MmBTU

Natural Gas

Futures

9,513

(3)

MmBTU

Natural Gas

Futures

(5,760)

(4)

MmBTU

Natural Gas

Futures

Tons

Soybean Meal

Options

961

Bushels

Soybeans

Forwards

25,289

—

Bushels

Corn

Forwards

—

(226,298)

Gallons

Ethanol

Forwards

124

(231)

Tons

Distillers Grains

Forwards

—

(58,803)

Pounds

Renewable Corn Oil

Forwards

8,788

(12)

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.