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.
The company owns a
62.5%
limited partner interest and a
2.0%
general partner interest in Green Plains Partners LP. Public investors own the remaining
35.5%
limited partner interest in the partnership. The partnership is consolidated in the company’s financial statements.
Effective April 1, 2016, the company increased its ownership of BioProcess Algae, a joint venture formed in 2008, to
82.8%
and consolidated BioProcess Algae in its consolidated financial statements beginning on that date.
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, the consolidated financial statements should be read in conjunction with the company’s annual report on Form 10-K for the year ended December 31, 2016.
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 were reclassified to conform to the current year presentation. These reclassifications did not affect total revenues, costs and expenses, net income or stockholders’ equity.
Use of Estimates in the Preparation of Consolidated Financial Statements
The preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Key accounting policies, including but not limited to those relating to revenue recognition, depreciation of property and equipment, impairment of long-lived assets and goodwill, derivative financial instruments, and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.
Description of Business
Green Plains is North America’s second largest consolidated owner of ethanol plants. The company operates within four business
segments: (1) ethanol production, which includes the production of ethanol, distillers grains and corn oil, (2) agribusiness and energy services, which includes grain handling and storage and marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil, natural gas and other commodities, (3) food and ingredients, which
includes
cattle feedlot
s
,
vinegar production
and food-
grade corn oil
operations, and (4) partnership, which includes fuel storage and transportation services.
Revenue Recognition
The company recognizes revenue when the following criteria are satisfied: persuasive evidence that an arrangement exists, title of product and risk of loss are transferred to the customer, price is fixed and determinable and collectability is reasonably assured.
Sales of ethanol, distillers grains, corn oil, natural gas and other commodities by the company’s marketing business are recognized when title of product and risk of loss are transferred to an external customer. Revenues related to marketing for third parties are presented on a gross basis when the company takes title of the product and assumes risk of loss. Unearned revenue is recorded for goods in transit when the company has received payment but the title 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 fixed-price, 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. These transactions are reported net as a component of revenues. Revenues also include realized gains and losses on related derivative financial instruments, ineffectiveness on cash flow hedges and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income or loss.
Sales of products, including agricultural commodities, cattle and vinegar, are recognized when title of product and risk of loss are transferred to the customer, which depends on the agreed upon terms. The sales terms provide passage of title when shipment is made or the commodity is delivered. Revenues related to grain merchandising are presented gross and include shipping and handling, which is also a component of cost of goods sold. Revenues from grain storage are recognized when services are rendered.
A substantial portion of the partnership revenues are derived from fixed-fee commercial agreements for storage, terminal or transportation services. The partnership recognizes revenue when there is evidence an arrangement exists; risk of loss and title transfer to the customer; the price is fixed or determinable; and collectability is reasonably ensured. Revenues from base storage, terminal or transportation services are recognized once these services are performed, which occurs when the product is delivered to the customer.
Cost of Goods Sold
Cost of goods sold includes direct labor, materials and plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in ethanol plant, vinegar and cattle feedlot operations. Grain purchasing and receiving costs, excluding labor costs for grain buyers and scale operators, are also included in cost of goods sold. Materials include the cost of corn feedstock, denaturant, process chemicals, cattle and veterinary supplies. Corn feedstock costs include unrealized 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 realized gains and losses on related derivative financial instruments, ineffectiveness on cash flow hedges and reclassifications of realized gains and losses on effective cash flow hedges from accumulated other comprehensive income or loss. Plant overhead consists primarily of plant and feedlot utilities, repairs and maintenance, yard expenses and outbound freight charges. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold.
The company uses exchange-traded futures and options contracts to minimize the effect of price changes on grain and cattle inventories and forward purchase and sales contracts. 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 differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based. Changes in the fair value of grain inventories held for sale, forward purchase and sale contracts and exchange-traded futures and options contracts are recognized as a component of cost of goods sold.
Operations and Maintenance Expenses
In the partnership segment, transportation expenses represent the primary component of operations and maintenance expenses. Transportation expenses includes railcar leases, freight and shipping of the company’s ethanol and co-products, as well as costs incurred storing ethanol at destination terminals.
Derivative Financial Instruments
The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to minimize risk and the effect of price changes related to corn, ethanol, cattle
,
natural gas
and crude oil
. 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.
The company evaluates its physical delivery contracts to determine if they qualify for normal purchase or sale exemptions which are expected to be used or sold over a reasonable period in the normal course of business. Contracts that do not meet the normal purchase or sale criteria are recorded at fair value. Changes in fair value are recorded in operating income unless the contracts qualify for, and the company elects, hedge accounting treatment.
Certain qualifying derivatives
related to the ethanol production, agribusiness and energy services and food and ingredients segments are designated as cash flow hedges. The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash
flow hedges. Ineffectiveness is recognized in current period results, while other unrealized gains and losses are reflected in accumulated other comprehensive income until the gain or loss from the underlying hedged transaction is realized. 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 other current liabilities at fair value.
At times, the company hedges its exposure to changes in the value of inventories and designates qualifying derivatives as fair value hedges. The carrying amount of the hedged inventory is adjusted in current period results for changes in fair value. Ineffectiveness of the hedges is recognized in current period results to the extent the change in fair value of the inventory is not offset by the change in fair value of the derivative.
Recent Accounting Pronouncements
Effective January 1, 2017, the company adopted the amended guidance in ASC Topic 330,
Inventory: Simplifying the Measurement of Inventory
, which requires inventory to be measured at lower of cost or net realizable value. Net realizable value is the estimated selling prices during the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amended guidance was applied prospectively.
Effective January 1, 2017, the company adopted the amended guidance in ASC Topic 718,
Compensation – Stock Compensation
: Improvements to Employee Share-Based Payment Accounting
, which requires all income tax effects of awards to be recognized in the income statement when the awards vest or settle. The amended guidance also allows an employer to repurchase more of an employee’s shares than it can currently for tax withholding purposes without triggering liability accounting and make a policy election to account for forfeitures as they occur. The amended guidance requiring recognition of excess tax benefits and tax deficiencies in the income statement was applied prospectively. The amended guidance related to the timing of when excess tax benefits are recognized, did not have an impact on the consolidated financial statements. The amended guidance related to the presentation of employee taxes paid on the statement of cash flows was applied retrospectively. This change resulted in a
$2.
2
million increase in cash flows from operating activities and a decrease in cash flows f
rom financing activities for the six months ended
June 30, 2016
. The company has elected to account for forfeitures as they occur. This change did not have a material impact on the financial
statements.
Effective January 1, 2018, the company will adopt the amended guidance in ASC Topic 230,
Statement of Cash Flows: Restricted Cash
, which requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amended guidance will be applied retrospectively.
Effective January 1, 2018, the company will adopt the amended guidance in ASC Topic 606,
Revenue from Contracts with Customers
. ASC Topic 606 is designed to create improved revenue recognition and disclosure comparability in financial statements. The provisions of ASC Topic 606 include a five-step process by which an entity will determine revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which an entity expects to be entitled in exchange for those goods or services. The new guidance requires the company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the company satisfies the performance obligation. ASC Topic 606 requires certain disclosures about contracts with customers and provides more comprehensive guidance for transactions such as service revenue, contract modifications, and
multiple-element arrangements.
The new standard is effective for fiscal years and interim periods within those years, beginning after December 15, 2017 and allows for early adoption.
The company is in the process of completing a comparison of the company’s current revenue recognition policies to the requirements of ASC Topic 606 for each of the company’s major revenue categories. The company has established a cross-functional implementation team, consisting of representatives from various business segments. Initial assessment indicates that the amended guidance will not materially change the amount or timing of revenues recognized by the company and the majority of the company's contracts will continue to be recognized at a point in time and that the number of performance obligations and the accounting for variable consideration are not expected to be significantly different from current practice. In addition, many of the company's sales contracts are considered derivatives under ASC Topic 815,
Derivatives and Hedging
, and are therefore excluded from the scope of Topic 606. ASC Topic 606 will also require disclosure of significant changes in contract asset and contract liability balances period to period and the amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period, as applicable. ASC Topic 606 provides for adoption either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The company anticipates finalizing its assessment of the financial impact of the new guidance on its consolidated financial statements during the third quarter of 2017. The company anticipates adopting the amended guidance using the modified retrospective transition method.
Effective January 1, 2018, the company will adopt the amended guidance in ASC Topic 740,
Income Taxes: Intra-Entity Transfers of Assets other than Inventory
, which requires the recognition of current and deferred income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amended guidance will be applied on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption.
Effective January 1, 2018, the company will adopt the amended guidance in ASC Topic 805,
Business Combinations: Clarifying the Definition of a Business
, which clarifies the definition of a business with the objective of adding guidance to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amended guidance will be applied prospectively.
Effective January 1, 2019, the company will adopt the amended guidance in ASC Topic 842,
Leases
, which aims to make leasing activities more transparent and comparable and requires substantially all leases to be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. Early application is permitted. The company is currently evaluating the impact the adoption of the amended guidance will have on the consolidated financial statements and related disclosures
, but expects the adoption will result in a significant increase in total assets and liabilities
.
The amended guidance will be applied on a modified retrospective basis.
Effective January 1, 2020, the company will adopt the amended guidance in ASC Topic 350,
Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment
, which simplifies the measurement of goodwill by eliminating Step 2 from the goodwill impairment test.
The annual
goodwill impairment test will be performed by comparing the fair value of a reporting unit with its carrying amount
. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
The amended guidance will be applied prospectively
.
2
. ACQUISITIONS
Acquisition of
Cattle Feedlots
On May 16, 2017, the company
acquire
d
two
cattle-feeding operations from Cargill Cattle Feeders, LLC for
$
57
.7
million
, including
certain
working capital adjus
tments.
The transaction included
the feed yards located in Leoti, Kan
sas and
Yuma, Colorado
,
which
add
ed
combined feedlot capacity of
155,000
head of cattle to the company’s operations. The transaction w
as
financed using cash on hand.
The
re were no material
acquisition costs
recorded
for the acquisition.
As part of th
e transaction, the company
also enter
ed
into a long-term cattle supply agreement with Cargill Meat Solutions Corporation. Under the cattle supply agreement, all cattle placed in the Leoti, Yuma and the company’s existing Kismet, Kansas feedlots will be sold exclusively to Cargill Meat Soluti
ons under an agreed upon
pricing arrangement.
The purchase price allocation is based on the p
reliminary results of internal
valuations. The purchase price and purchase price allocation are preliminary until contractual post-closing working capital adjustments
and valuations
are finalized.
The following
is a summary of the preliminary purchase price of assets acquired and liabilities assumed (in thousands):
|
|
|
|
|
Amounts of Identifiable Assets Acquired
and Liabilities Assumed
|
Inventory
|
|
$
|
20,576
|
Prepaid expenses and other
|
|
|
52
|
Property and equipment, net
|
|
37,205
|
|
|
|
|
|
Current liabilities
|
|
(180)
|
|
Total identifiable net assets
|
$
|
57,653
|
Acquisition of Fleischmann’s Vinegar Company
On October 3, 2016, the company acquired all of the issued and outstanding stock of SCI Ingredients
Holdings, Inc.
, the holding company of Fleischmann’s Vinegar Company, Inc., for $258.3 million in cash
. A portion of the purchase price was used to repay existing debt
. Fleischmann’s Vinegar is one of the world’s largest producers of food-grade industrial vinegar.
The purchase price allocation is based
on the preliminary results of independent valuations. The
purchase price and purchase price allocation
are prelim
inary until
the
fin
al independent valuation report
s are
issued.
The following
is a summary of the preliminary purchase price of assets acquired and liabilities assumed (in thousands):
|
|
|
|
|
Amounts of Identifiable Assets Acquired
and Liabilities Assumed
|
Cash
|
|
$
|
4,148
|
Inventory
|
|
|
9,308
|
Accounts receivable, net
|
|
|
13,919
|
Prepaid expenses and other
|
|
|
1,054
|
Property and equipment
|
|
|
43,011
|
Intangible assets
|
|
|
94,500
|
|
|
|
|
|
Current liabilities
|
|
|
(9,689)
|
Income taxes payable
|
|
|
(330)
|
Deferred tax liabilities
|
|
|
(40,421)
|
|
Total identifiable net assets
|
|
115,500
|
|
|
|
|
|
Goodwill
|
|
142,819
|
|
Purchase price
|
$
|
258,319
|
As of
June 30, 2017
, based
on the preliminary valuations
, the company’s customer relationship intangible asset recognized in connection with the Fleischmann’s
acquisition is
$79.8
million, net of
$4.2
million of accumulated
amortization, and has a
15
-
year weighted-average amortization period. As of
June 30, 2017
, the company also has an indefinite-lived trade name intangible
asset of
$10.5
million. The company
recognized
$1.4
million
and
$2.8
million
of amortization expense associated with the amortizing customer relationship intangible asset
during the three and six months ended June 30, 2017, respectively,
and
expects
estimated amortization expense for the next
five
years of
$5.6
million per annum. The excess
of the purchase price over the intangibles fair values was allocated to goodwill,
none
of which is expected
to be deductible for tax purposes. The goodwill is primarily attributable to the synergies expected to arise after the acquisition.
Acquisition of
Ethanol Plants
On September 23, 2016, the company acquired
three
ethanol plants located in Madison, Illinois, Mount Vernon, Indiana, and York, Nebraska from
subsidiaries of
Abengoa
S.A.
for approximately $23
4
.
9
million for the ethanol plant assets
,
and
$1
9
.
1
million for working capital acquired
and liabilities assumed
. These ethanol facilities have a combined annual production capacity of
approximately
23
0
mmgy.
The purchase price
allocation is based on the preliminary results of an independent valuation. The purchase price and purchase price allocation are
preliminary
until
the
final independent valuation report is issued. The following is a summary of the preliminary purchase
price of assets acquired and
liabilities assumed (in thousands):
|
|
|
|
|
Amounts of Identifiable Assets Acquired
and Liabilities Assumed
|
Inventory
|
|
$
|
16,904
|
Accounts receivable, net
|
|
1,826
|
Prepaid expenses and other
|
|
|
2,224
|
Property and equipment, net
|
|
234,947
|
Other assets
|
|
|
3,885
|
|
|
|
|
|
Current maturities of long-term debt
|
|
(406)
|
Current liabilities
|
|
(2,580)
|
Long-term debt
|
|
(2,763)
|
|
Total identifiable net assets
|
$
|
254,037
|
Concurrently with the company’s acquisition of the Abengoa ethanol plants, on September 23, 2016, the partnership acquired the storage assets of the Abengoa ethanol plants from the company for
$90
.0
million in a transfer between entities under common control and entered into amendments to the related commercial agree
ments with Green Plains Trade
.
3
. FAIR VALUE DISCLOSURES
The following methods, assumptions and valuation techniques were used to
estimate 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 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open trade equity and option values in the company’s brokerage accounts.
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 segment are valued at nearby futures values, plus or minus nearby basis.
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.
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, 2017
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant Other
Observable Inputs
|
|
Reclassification for
Balance Sheet
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
Presentation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
195,442
|
|
$
|
-
|
|
$
|
-
|
|
$
|
195,442
|
Restricted cash
|
|
29,592
|
|
|
-
|
|
|
-
|
|
|
29,592
|
Margin deposits
|
|
29,743
|
|
|
-
|
|
|
(29,743)
|
|
|
-
|
Inventories carried at market
|
|
-
|
|
|
86,441
|
|
|
-
|
|
|
86,441
|
Unrealized gains on derivatives
|
|
9,460
|
|
|
5,938
|
|
|
17,386
|
|
|
32,784
|
Other assets
|
|
115
|
|
|
12
|
|
|
-
|
|
|
127
|
Total assets measured at fair value
|
$
|
264,352
|
|
$
|
92,391
|
|
$
|
(12,357)
|
|
$
|
344,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
(1)
|
$
|
-
|
|
$
|
15,754
|
|
$
|
-
|
|
$
|
15,754
|
Unrealized losses on derivatives
|
|
12,357
|
|
|
8,165
|
|
|
(12,357)
|
|
|
8,165
|
Other
|
|
-
|
|
|
6
|
|
|
-
|
|
|
6
|
Total liabilities measured at fair value
|
$
|
12,357
|
|
$
|
23,925
|
|
$
|
(12,357)
|
|
$
|
23,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2016
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
|
Significant Other
Observable Inputs
|
|
Reclassification for
Balance Sheet
|
|
|
|
|
(Level 1)
|
|
(Level 2)
|
|
Presentation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
304,211
|
|
$
|
-
|
|
$
|
-
|
|
$
|
304,211
|
Restricted cash
|
|
51,979
|
|
|
-
|
|
|
-
|
|
|
51,979
|
Margin deposits
|
|
50,601
|
|
|
-
|
|
|
(50,601)
|
|
|
-
|
Inventories carried at market
(2)
|
|
-
|
|
|
154,022
|
|
|
-
|
|
|
154,022
|
Unrealized gains on derivatives
|
|
8,272
|
|
|
14,818
|
|
|
24,146
|
|
|
47,236
|
Other assets
|
|
116
|
|
|
-
|
|
|
-
|
|
|
116
|
Total assets measured at fair value
|
$
|
415,179
|
|
$
|
168,840
|
|
$
|
(26,455)
|
|
$
|
557,564
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
(1)
|
$
|
-
|
|
$
|
35,288
|
|
$
|
-
|
|
$
|
35,288
|
Unrealized losses on derivatives
|
|
26,455
|
|
|
8,916
|
|
|
(26,455)
|
|
|
8,916
|
Other liabilities
|
|
-
|
|
|
81
|
|
|
-
|
|
|
81
|
Total liabilities measured at fair value
|
$
|
26,455
|
|
$
|
44,285
|
|
$
|
(26,455)
|
|
$
|
44,285
|
|
(1)
|
|
Accounts payable is generally stated at historical amounts with the
exception of
$1
5.
8
million and $35.3
million at
June 30, 2017
and December 31, 2016, respectively, related to certain delivered inventory
subject to
changes in commodity prices. These payables are hybrid financial instruments for which the company has elected the fair value option.
|
|
(2)
|
|
Inventories carried at market have been revised from previously reported results to include
$77.0
million of inventories held under a fair value hedging relationship
.
T
here wa
s no impact to the
financial s
tatements resulting from this revision.
|
The company believes the fair value of its debt was
approximately
$1.1
b
illion compared with a
book value of
$1.1
b
illion at
June 30, 2017
, and
December 31, 2016
, respectively.
The company estimated the fair value o
f its outstanding debt using Level 2 inputs. Th
e company believes the fair values of its accounts receivable app
roximated book value, which was
$
134.9
million
and $147
.5 million
at
June 30, 2017
,
and
December 31, 2016
, respectively
.
Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible
assets and goodwill acquired and
the
equity component of convertible debt
issued
repr
esent Level 3 measurements that
were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued
.
4
. SEGMENT INFORMATION
As a result of acquisitions during 2016, the company implemented organization
al segment
changes during the fourth quarter of 2016, whereby the company management now reports
the financial and operating performance in the following
four
operating segments:
(1) ethanol production, which includes the production of ethanol, distillers grains and corn oil, (2) agribusiness
and energy services, which includes grain handling and storage and marketing and merchant trading for company-produced and third-party ethanol, distillers grains, corn oil
, natural gas
and other commodities,
(3)
food and
ingredients, which includes
cattle feedlot
s
,
vinegar
production and food
-
grade corn oil
operations and
(4) partnership, which includes fuel storage and transportation services.
Prior periods have been reclassified to conform to the revised segment presentation.
T
he company has re-evaluated the profitability measure of its reportable segments’ operating performance and has determined that segment EBITDA (earnings before interest, taxes, depreciation and amortization) is
primarily used by the company’s management to evaluate segment operating activities, and therefore is
a more meaningful profitability measure than the previously r
eported segment operating income
.
In addition, EBITDA is a financial measure that is widely used by analysts and investors in the company’s industries.
As a result, the company is now including segment EBITDA as a performance measure.
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 bus
iness, 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 and corn oil for the ethanol production segment. The partnership segment provides fuel storage and transportation services for the agribusiness and energy services 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Ethanol production:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
$
|
617,297
|
|
$
|
595,168
|
|
$
|
1,237,176
|
|
$
|
1,123,496
|
Intersegment revenues
|
|
1,549
|
|
|
-
|
|
|
3,045
|
|
|
-
|
Total segment revenues
|
|
618,846
|
|
|
595,168
|
|
|
1,240,221
|
|
|
1,123,496
|
Agribusiness and energy services:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
|
150,755
|
|
|
203,158
|
|
|
319,066
|
|
|
363,303
|
Intersegment revenues
|
|
9,781
|
|
|
8,589
|
|
|
19,273
|
|
|
15,998
|
Total segment revenues
|
|
160,536
|
|
|
211,747
|
|
|
338,339
|
|
|
379,301
|
Food and ingredients:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
|
116,660
|
|
|
87,446
|
|
|
214,682
|
|
|
146,157
|
Intersegment revenues
|
|
37
|
|
|
38
|
|
|
75
|
|
|
75
|
Total segment revenues
|
|
116,697
|
|
|
87,484
|
|
|
214,757
|
|
|
146,232
|
Partnership:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from external customers
|
|
1,551
|
|
|
1,955
|
|
|
3,023
|
|
|
3,975
|
Intersegment revenues
|
|
23,514
|
|
|
23,538
|
|
|
49,271
|
|
|
45,306
|
Total segment revenues
|
|
25,065
|
|
|
25,493
|
|
|
52,294
|
|
|
49,281
|
Revenues including intersegment activity
|
|
921,144
|
|
|
919,892
|
|
|
1,845,611
|
|
|
1,698,310
|
Intersegment eliminations
|
|
(34,881)
|
|
|
(32,165)
|
|
|
(71,664)
|
|
|
(61,379)
|
Revenues as reported
|
$
|
886,263
|
|
$
|
887,727
|
|
$
|
1,773,947
|
|
$
|
1,636,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
Ethanol production
|
$
|
612,646
|
|
$
|
565,438
|
|
$
|
1,211,784
|
|
$
|
1,099,936
|
Agribusiness and energy services
|
|
152,110
|
|
|
195,077
|
|
|
318,504
|
|
|
354,492
|
Food and ingredients
|
|
100,009
|
|
|
81,041
|
|
|
183,044
|
|
|
140,295
|
Partnership
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Intersegment eliminations
|
|
(34,746)
|
|
|
(32,032)
|
|
|
(71,417)
|
|
|
(60,512)
|
|
$
|
830,019
|
|
$
|
809,524
|
|
$
|
1,641,915
|
|
$
|
1,534,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
Ethanol production
|
$
|
(873)
|
|
$
|
22,744
|
|
$
|
12,951
|
|
$
|
9,008
|
Agribusiness and energy services
|
|
3,747
|
|
|
11,881
|
|
|
10,760
|
|
|
14,936
|
Food and ingredients
|
|
13,955
|
|
|
6,042
|
|
|
26,469
|
|
|
4,965
|
Partnership
|
|
16,066
|
|
|
16,312
|
|
|
33,960
|
|
|
30,621
|
Intersegment eliminations
|
|
(80)
|
|
|
(314)
|
|
|
(155)
|
|
|
(1,135)
|
Corporate activities
|
|
(8,742)
|
|
|
(9,009)
|
|
|
(16,063)
|
|
|
(16,505)
|
|
$
|
24,073
|
|
$
|
47,656
|
|
$
|
67,922
|
|
$
|
41,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
Ethanol production
|
$
|
20,142
|
|
$
|
15,150
|
|
$
|
40,484
|
|
$
|
30,930
|
Agribusiness and energy services
|
|
659
|
|
|
947
|
|
|
1,319
|
|
|
1,253
|
Food and ingredients
|
|
3,240
|
|
|
274
|
|
|
6,120
|
|
|
545
|
Partnership
|
|
1,247
|
|
|
1,488
|
|
|
2,501
|
|
|
2,705
|
Corporate activities
|
|
900
|
|
|
842
|
|
|
1,847
|
|
|
1,413
|
|
$
|
26,188
|
|
$
|
18,701
|
|
$
|
52,271
|
|
$
|
36,846
|
The following table reconciles net income (loss) to EBITDA for the periods indicated (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
(11,796)
|
|
$
|
12,985
|
|
$
|
(10,145)
|
|
$
|
(6,831)
|
Interest expense
|
|
19,430
|
|
|
10,499
|
|
|
37,926
|
|
|
21,297
|
Income tax expense (benefit)
|
|
(9,749)
|
|
|
5,471
|
|
|
(12,130)
|
|
|
(9,422)
|
Depreciation and amortization
|
|
26,188
|
|
|
18,701
|
|
|
52,271
|
|
|
36,846
|
EBITDA
|
$
|
24,073
|
|
$
|
47,656
|
|
$
|
67,922
|
|
$
|
41,890
|
The following table sets forth third-party revenues by product line (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Ethanol
|
$
|
607,693
|
|
$
|
572,394
|
|
$
|
1,205,100
|
|
$
|
1,071,445
|
Distillers grains
|
|
87,696
|
|
|
115,507
|
|
|
206,392
|
|
|
227,724
|
Corn oil
|
|
46,791
|
|
|
41,009
|
|
|
87,488
|
|
|
61,883
|
Grain
|
|
28,498
|
|
|
64,742
|
|
|
54,522
|
|
|
115,797
|
Food and ingredients
|
|
102,029
|
|
|
75,178
|
|
|
192,514
|
|
|
131,411
|
Service revenues
|
|
1,551
|
|
|
1,955
|
|
|
3,023
|
|
|
3,975
|
Other
|
|
12,005
|
|
|
16,942
|
|
|
24,908
|
|
|
24,696
|
|
$
|
886,263
|
|
$
|
887,727
|
|
$
|
1,773,947
|
|
$
|
1,636,931
|
The following table sets forth total assets by operating segment (in thousands):
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2017
|
|
2016
|
Total assets
(1)
:
|
|
|
|
|
|
Ethanol production
|
$
|
1,138,707
|
|
$
|
1,206,155
|
Agribusiness and energy services
|
|
450,477
|
|
|
579,977
|
Food and ingredients
|
|
554,859
|
|
|
406,429
|
Partnership
|
|
75,123
|
|
|
74,999
|
Corporate assets
|
|
187,161
|
|
|
257,652
|
Intersegment eliminations
|
|
(9,704)
|
|
|
(18,720)
|
|
$
|
2,396,623
|
|
$
|
2,506,492
|
|
(1)
|
|
Asset balances by segment
exclude intercompany
receivable balances.
|
5
. INVENTORIES
Inventories are carried at lower of cost or
net realizable value
, except for commodities held for sale
and fair-value hedged inventories. Commodities held for sale are reported at market value
.
The components of inventories are as follows (in thousands):
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Finished goods
|
$
|
89,020
|
|
$
|
99,009
|
Commodities held for sale
|
|
46,847
|
|
|
65,926
|
Raw materials
|
|
128,270
|
|
|
135,516
|
Work-in-process
|
|
147,589
|
|
|
91,093
|
Supplies and parts
|
|
33,012
|
|
|
30,637
|
|
$
|
444,738
|
|
$
|
422,181
|
6
. GOODWILL
The company did not have any changes in the carrying amount of goodwill, which was $
183.7
million at
June 30, 2017
,
and
December 31, 2016
. Goodwill of $
30.3
million,
$142.8
million and
$
10.6
million
is attributable to the ethanol production segment
, food and
ingredient
s
segment and the partnership segment, respectively.
7
. DERIVATIVE FINANCIAL INSTRUMENTS
At
June 30, 2017
, the company’s consolidated balance
sheet reflected unrealized losses of
$10.4
million, net of tax, in accumulated other comprehensive income (loss). The company expects these losses will be
reclassified
in operating income over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating income 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'
|
|
Liability Derivatives'
|
|
|
Fair Value
|
|
Fair Value
|
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Derivative financial instruments
(1)
|
|
$
|
3,041
|
(2)
|
$
|
14,818
|
(3)
|
$
|
-
|
|
$
|
-
|
Other assets
|
|
|
12
|
|
|
-
|
|
|
-
|
|
|
-
|
Accrued and other liabilities
|
|
|
-
|
|
|
-
|
|
|
8,165
|
|
|
27,099
|
Other liabilities
|
|
|
-
|
|
|
-
|
|
|
6
|
|
|
81
|
Total
|
|
$
|
3,053
|
|
$
|
14,818
|
|
$
|
8,171
|
|
$
|
27,180
|
(1)
Derivative financial instruments as reflected on the consolidated balance sheets are net of related margin deposit
assets of $
29.7
million and
$
50.6
million at
June 30, 2017
and
December 31, 2016
, respectively.
(2)
Balance at
June 30, 2017
includes $
7.9
million
of net unrealized losses
on derivative f
inancial instruments designated as cash flow hedging instruments.
(3)
Balance at
December 31, 2016
includ
es $
17.0
million of net unrealized losses on deri
vative financial instruments designated as cash flow hedging instruments.
Refer to
Note
3
- Fair Value Disclosures
, which contains fair value information related to derivative financial instruments.
Effect of Derivative Instruments on Consolidated Statements of Operations and Consolidated Statements of Stockholders’ Equity and 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):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) on Derivative Instruments Not
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Designated in a Hedging Relationship
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
$
|
(5,215)
|
|
$
|
10,065
|
|
$
|
(10,263)
|
|
$
|
7,271
|
Cost of goods sold
|
|
|
3,284
|
|
|
(2,856)
|
|
|
15,220
|
|
|
(8,703)
|
Net increase (decrease) recognized in earnings before tax
|
|
$
|
(1,931)
|
|
$
|
7,209
|
|
$
|
4,957
|
|
$
|
(1,432)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) Due to Ineffectiveness
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
of Cash Flow Hedges
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
$
|
(48)
|
|
$
|
(38)
|
|
$
|
(181)
|
|
$
|
(38)
|
Cost of goods sold
|
|
|
-
|
|
|
(160)
|
|
|
-
|
|
|
(160)
|
Net decrease recognized in earnings before tax
|
|
$
|
(48)
|
|
$
|
(198)
|
|
$
|
(181)
|
|
$
|
(198)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) Reclassified from Accumulated
Other Comprehensive Income (Loss)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
into Net Income
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
$
|
2,825
|
|
$
|
(13,470)
|
|
$
|
6,977
|
|
$
|
(13,225)
|
Cost of goods sold
|
|
|
(648)
|
|
|
10,755
|
|
|
182
|
|
|
12,644
|
Net increase (decrease) recognized in earnings before tax
|
|
$
|
2,177
|
|
$
|
(2,715)
|
|
$
|
7,159
|
|
$
|
(581)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Portion of Cash Flow
Hedges Recognized in
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Other Comprehensive Income (Loss)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Commodity Contracts
|
|
$
|
(5,444)
|
|
$
|
(7,689)
|
|
$
|
(2,834)
|
|
$
|
(5,407)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains (Losses) from Fair Value
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Hedges of Inventory
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues (effect of change in inventory value)
|
|
$
|
(31)
|
|
$
|
(341)
|
|
$
|
1,390
|
|
$
|
1,419
|
Cost of goods sold (effect of change in inventory value)
|
|
|
(2,526)
|
|
|
13,080
|
|
|
(4,454)
|
|
|
8,182
|
Revenues (effect of fair value hedge)
|
|
|
(578)
|
|
|
341
|
|
|
(1,673)
|
|
|
(1,419)
|
Cost of goods sold (effect of fair value hedge)
|
|
|
2,406
|
|
|
(14,373)
|
|
|
5,445
|
|
|
(8,564)
|
Ineffectiveness recognized in earnings before tax
|
|
$
|
(729)
|
|
$
|
(1,293)
|
|
$
|
708
|
|
$
|
(382)
|
There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the
three and six months ended June 30, 2017
and
2016
.
The open commodity derivative positions as of
June 30, 2017
, are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
|
Exchange Traded
|
|
Non-Exchange Traded
|
|
|
|
|
Derivative
Instruments
|
|
Net Long &
(Short)
(1)
|
|
Long
(2)
|
|
(Short)
(2)
|
|
Unit of
Measure
|
|
Commodity
|
|
|
|
|
|
|
|
|
|
|
|
Futures
|
|
(82,215)
|
|
|
|
|
|
Bushels
|
|
Corn, Soybeans and Wheat
|
Futures
|
|
(7,150)
|
(4)
|
|
|
|
|
Bushels
|
|
Corn
|
Futures
|
|
166,916
|
|
|
|
|
|
Gallons
|
|
Ethanol
|
Futures
|
|
(1,150)
|
|
|
|
|
|
MmBTU
|
|
Natural Gas
|
Futures
|
|
(12,143)
|
(4)
|
|
|
|
|
MmBTU
|
|
Natural Gas
|
Futures
|
|
3,140
|
|
|
|
|
|
Pounds
|
|
Livestock
|
Futures
|
|
(183,960)
|
(3)
|
|
|
|
|
Pounds
|
|
Livestock
|
Futures
|
|
(33)
|
|
|
|
|
|
Barrels
|
|
Crude Oil
|
Futures
|
|
(43)
|
(4)
|
|
|
|
|
Barrels
|
|
Crude Oil
|
Futures
|
|
(1,380)
|
|
|
|
|
|
Pounds
|
|
Soybean Oil
|
Futures
|
|
4,914
|
(3)
|
|
|
|
|
Gallons
|
|
Natural Gasoline
|
Options
|
|
23,737
|
|
|
|
|
|
Bushels
|
|
Corn, Soybeans and Wheat
|
Options
|
|
(3,333)
|
|
|
|
|
|
Gallons
|
|
Ethanol
|
Options
|
|
347
|
|
|
|
|
|
MmBTU
|
|
Natural Gas
|
Options
|
|
(7,160)
|
|
|
|
|
|
Pounds
|
|
Livestock
|
Options
|
|
37
|
|
|
|
|
|
Barrels
|
|
Crude Oil
|
Options
|
|
(2,596)
|
|
|
|
|
|
Pounds
|
|
Soybean Oil
|
Forwards
|
|
|
|
26,713
|
|
(1,194)
|
|
Bushels
|
|
Corn and Soybeans
|
Forwards
|
|
|
|
74,010
|
|
(367,236)
|
|
Gallons
|
|
Ethanol
|
Forwards
|
|
|
|
158
|
|
(242)
|
|
Tons
|
|
Distillers Grains
|
Forwards
|
|
|
|
24,925
|
|
(128,199)
|
|
Pounds
|
|
Corn Oil
|
Forwards
|
|
|
|
14,438
|
|
(1,711)
|
|
MmBTU
|
|
Natural Gas
|
Forwards
|
|
|
|
93
|
|
(93)
|
|
Barrels
|
|
Crude Oil
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Exchange traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis.
|
|
(2)
|
|
Non-exchange traded forwards are presented on a gross long and (short) position basis including both fixed-price and basis contracts.
|
|
(3)
|
|
Futures used for cash flow hedges.
|
|
(4)
|
|
Futures or non-exchange traded forwards used for fair
value
hedges.
|
Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations.
Included in revenues are net gains on energy trading contracts of
$6.8
million
and
$15.1
million for the
three and six months ended June 30, 2017
,
respectively, and net losses of
$0.3
million and net gains of
$3.0
million for
the
three and six months ended June 30, 2016
,
respectively.
8. DEBT
The components of long-term debt are as follows (in thousands):
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Green Plains Processing:
|
|
|
|
|
|
$345.0 million term loan
|
$
|
264,401
|
|
$
|
294,011
|
Fleischmann's Vinegar:
|
|
|
|
|
|
$130.0 million term loan
|
|
125,312
|
|
|
125,609
|
$15.0 million revolving credit facility
|
|
4,500
|
|
|
4,000
|
Green Plains Partners:
|
|
|
|
|
|
$155.0 million revolving credit facility
|
|
127,900
|
|
|
129,000
|
Corporate:
|
|
|
|
|
|
$120.0 million convertible notes due 2018
|
|
59,410
|
|
|
108,817
|
$170.0 million convertible notes due 2022
|
|
130,215
|
|
|
127,239
|
Other
|
|
28,220
|
|
|
28,993
|
Total long-term debt
|
|
739,958
|
|
|
817,669
|
Less: current portion of long-term debt
|
|
(6,178)
|
|
|
(35,059)
|
Long-term debt
|
$
|
733,780
|
|
$
|
782,610
|
Short-term notes payable and other borrowings at June 30, 2017, include working capital revolvers at Green Plains Cattle, Green Plai
ns
Grain and Green Plains Trade with outstanding balances of
$145.0
million, $
112.0
million and $
84.5
million, respectively
. Short-term notes payable and other borrowings at December 31, 2016, include working capital revolvers at Green Plains Cattle, Green Plains Grain and Green Plains Trade with outstanding balances of
$63.5
million, $
102.0
million and $
125.7
million, respectively.
Ethanol Production Segment
Green Plains Processing has a
$345.0
million senior secured credit facility, which is guaranteed by the company and subsidiaries of Green Plains Processing and secured by the stock and substantially all of the assets of Green Plains Processing. The interest rate is
LIBOR, subject to a 1.00% floor, plus 5.50%
and matures on June 30, 2020. The terms of the credit facility require the borrower to maintain a maximum total leverage ratio of
4.00x
at the end of each quarter, decreasing to
3.25x
over the life of the credit facility, and a minimum fi
xed charge coverage ratio of
1.25x
. As of June 30, 2017, the maximum total leverage ratio was
3.75x
. The credit facility
also has a provision requiring the company to make special quarterly payments of
50%
to
75%
of its available free cash flow, subject to certain limitations.
At June 30, 2017, the interest rate on this term debt
was
6.72%
. Scheduled
principal payments are
$0.9
million each quarter until maturity.
Agribusiness and Energy Services Segment
Green Plains Grain has a $
125.0
million senior secured asset-based revolving credit facility, to finance working capital up to the maximum commitment based on eligible collateral equal to the sum of percentages of eligible cash, receivables and inventories, less miscellaneous adjustments. The credit facility matures on
July 26, 2019.
Advances are subject to an interest rate equal to
LIBOR plus 3.00%
or the lenders’
base rate plus 2.00%
. The credit facility also includes an accordion feature that enables the facility to be increased by up to $
75.0
million with agent approval. The credit facility can also be increased by up to
$50.0
million for seasonal borrowings. Total commitments outstanding cannot exceed
$250.0
million.
Lenders receive a first priority lien on certain cash, inventory, accounts receivable and other assets owned by Green Plains Grain as security on the credit facility. The terms impose affirmative and negative covenants, including maintaining
minimum working
capital of
$20.0
million and tangible net worth of
$26.3
million for 2017
. Capital expenditures are limited to
$8.0
million per year under the credit facility, plus equity contributions from the company and unused amounts of up to $8.0 million from the previous year. In addition, the credit facility requires the company to maintain a minimum fixed charge coverage ratio of
1.25
to 1.00 and a maximum annual leverage ratio of
6.00
to 1.00 at the end of each quarter. The fixed charge coverage ratio and long-term capitalization ratio apply only if the company has long-term indebtedness on the date of
calculation. As of June 30, 2017, Green Plains Grain had no long-term indebtedness. The credit
facility also contains restrictions on distributions related to capital stock, with exceptions for distributions up to
50%
of net profit before tax, subject to certain conditions.
Green Plains Trade has a $
150.0
million senior secured asset-based revolving credit facility, which matures on
November 26, 2019,
to finance working capital for marketing and distribution activities based on eligible collateral equal to the sum of percentages of eligible receivables and inventories, less miscellaneous adjustments. Advances are subject to variable interest rates equal to
LIBOR plus 2.50%
or the
base rate plus 1.50%
. The unused portion of the credit facility is also subject to a commitment fee of
0.5%
per annum.
The terms impose affirmative and negative covenants, including maintaining a fixed charge coverage ratio of
1.15x
. Capital expenditures are
limited to
$1.5
million per
year under the credit facility. The credit facility also restricts distributions related to capital stock, with an exception for distributions up to
50%
of net income if, on a pro forma basis, (a) availability has been greater than
$10.0
million for the last 30 days and (b) the borrower would be in compliance with the fixed charge coverage ratio on the distribution date.
On July 28
, 2017
, the company
amended the
credit facility,
to increase the maximum commitment
from $150.0 million to
$300.0
million
and extend
the maturity
date to
July 28
, 2022
. The
amended
credit
facility increases advance rates and
modifies the eligible inventory definitions to include additional commodities and locations.
Advances are subject to variable interest rates equal to a daily
LIBOR rate plus 2.25%
or the
base rate plus 1.25%
.
The unused portion of the credit facility is also subject to a commitment fee of
0.375%
per annum.
At June 30, 2017, Green Plains T
rade had restricted cash of
$16.9
million on the
consolidated balance sheet, the use of which was restricted for repayment towards the outstanding loan balance.
Food and
Ingredients Segment
Green Plains Cattle has a senior secured asset-based revolving credit facility,
to finance working capital for the cattle feedlot operations
up to the maximum commitment based on eligible collateral equal to the sum of percentages of eligible receivabl
es, inventories and other current assets, less miscellaneous adjustments.
During the second quarter of 2017, the company amended its revolving credit facility to increase the maximum commitment from
$100.0
million to
$200.0
million until July 31, 2017, when it increased to
$300.0
million. The maturity date was
extended from October 31, 2017,
to April 30, 2020.
Advances, as amended, are subject to variable interest rates equal to
LIBOR plus 2.00% to 3.00%
, or the
base rate plus 1.00% to 2.00%
, depending upon the preceding three months’ excess borrowing availability.
The amended credit facility also includes an accordion feature that enables the credit facility to be increased by up to
$100.0
million with agent approval. The unused portion of the credit facility is also subject to a commitment fee of
0.20%
to
0.30%
per annum, depending on the preceding three months’ excess borrowing availability.
Lenders receive a first priority lien on certain cash, inventory, accounts receivable, property and equipment and other assets owned by Green Plains Cattle as security on the credit facility. The amended terms impose affirmative and negative covenants, including maintaining working capital of
15%
of the commitment amount, tangible net worth of
20%
of the commitment
amount, plus
50%
of net profit from the previous year, and
a total debt to tangible net worth ratio of
3.50x
. Capital expenditures are limited to
$10.0
million per year under the credit facility, plus
$10.0
million per year if funded by a contribution from parent, plus any unused amounts from the previous year.
Fleischmann’s Vinegar has a
$130.0
million senior secured term loan and a
$15.0
million senior secured revolving credit facility, which mature on October 3, 2022, to finance the purchase of Fleischmann’s Vinegar and to fund working capital for its vinegar manufacturing operations. Beginning January 1, 2017, the term loan is subject to mandatory prepayments based on the preceding fiscal year’s excess cash flow. Term loan prepayments are generally subject to prepayment fees of
1.0%
to
2.0%
if prepaid before the second anniversary of the credit agreement. The term loan and loans under the revolving credit facility each bear interest at a floating rate based on the consolidated total net leverage ratio, adjusted quarterly beginning September 30, 2017, to either a
base rate plus an applicable margin of 5.0% to 6.0%
or to
LIBOR plus an applicable margin of 6.0% to 7.0%
. The unused portion of the Revolving Loan Commitment is also subject to a commitment fee of
0.5%
per annum.
The credit agreement contains certain customary representations and warranties, affirmative covenants, negative covenants, financial covenants and events of default. The negative covenants include restrictions on the ability to incur
additional indebtedness, acquire and sell assets, create liens, make investments, make distributions and enter into transactions with affiliates. The financial covenants include requirements to maintain a minimum consolidated fixed charge coverage ratio ranging from
1.00x
to
1.10x
and a maximum consolidated total net leverage ratio ranging from
5.00x
to
7.00x
. The consolidated fixed charge coverage ratio is calculated by summing the four preceding fiscal quarters’ EBITDA less capital expenditures and dividing that sum by the sum of the four preceding fiscal quarters’ cash interest and taxes, scheduled principal payments and parent management fees. The consolidated total net leverage ratio is calculated by dividing total net indebtedness by the sum of the four preceding fiscal quarters’ EBITDA. Beginning in 2017, the credit facility also has a provision requiring the company to make special annual payments of
0%
to
50%
of its available free cash flow, subject to certain limitations.
Partnership Segment
Green Plains Partners, through a wholly owned subsidiary, has a
$155.0
million revolving credit facility, as amended, 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 le
verage ratio at a
base rate plus 1.25% to 2.00%
or
LIBOR plus 2.25% to 3.00%
. The credit facility may be increased up to
$100.0
million without the consent of the lenders. 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 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 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 restricting 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.
Corporate Activities
In August 2016, the company issued
$170.0
million of
4.125%
convertible senior notes due 2022. The 4.125% notes are senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year. The company may settle the 4.125% notes in cash, common stock or a combination of cash and common stock.
Prior to March 1, 2022, the 4.125% notes are not convertible unless certain conditions are satisfied. The conversion rate is subject to adjustment upon the occurrence of certain events, including when the quarterly cash dividend exceeds
$0.12
per share and upon redemption of the 4.125% notes. The initial conversion rate is
35.7143
shares of common stock per
$1,000
of principal, which is equal to a conversion price of approximately
$28.00
per share.
The company may redeem all, but not less than all, of the 4.125% notes at any time on or after September 1, 2020, if the company’s common stock equals or exceeds
140%
of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the company delivers notice of the redemption. The redemption price will equal
100%
of the principal plus any accrued and unpaid interest. Holders of the 4.125% notes have the option to require the company to repurchase the 4.125% notes in cash at a price equal to 100% of the principal plus accrued and unpaid interest when there is a fundamental
change, such as change in control.
If an event of default occurs, it could result in the 4.125% notes being declared due and payable.
In September 2013, the company issued
$120.0
million of
3.25%
convertible senior notes due 2018. The 3.25% notes are senior, unsecured obligations of the company, with interest payable on April 1 and October 1 of each year. The company may settle the 3.25% notes in cash, common stock or a combination of cash and common stock.
Prior to April 1, 2018, the 3.25% notes are not convertible unless certain conditions are satisfied. The conversion rate is subject to adjustment when the quarterly cash dividend exceeds
$0.04
per share. The conversion rate was recently adjusted to
49.7602
shares of common stock per
$1,000
of principal, which is equal to a conversion price of approximately
$20.10
per share. The company may be obligated to increase the conversion rate in certain events, including redemption of the 3.25% notes.
The company may redeem all of the 3.25% notes at any time, if the company’s common stock equals or exceeds
140%
of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the company delivers notice of the redemption. The redemption price will equal
100%
of the principal plus any accrued and unpaid interest. Holders of the 3.25% notes have the option to require the company to repurchase the 3.25% notes in cash at a price equal
to 100% of the principal plus accrued and unpaid interest when there is a fundamental change, such as change in control.
If an event of default occurs, it could result in the 3.25% notes being declared due and payable.
During the second quarter of 2017, the company entered into several privately negotiated agreements with holders, on behalf of certain beneficial owners of the company’s 3.25% notes. Under these agreements,
2,783,725
shares of the company’s common stock and approximately
$8.5
million in cash plus accrued but unpaid interest on the 3.25% notes, were exchanged for approximately
$56.3
million in aggregate principal amount of the 3.25% notes. Common stock held as treasury shares were exchanged for the 3.25% notes. Following the closings of the agreements,
$63.7
million aggregate principal amount of the 3.25% notes remain outstanding.
At issuance, the c
ompany separately accounted for the liability and equity components of the convertible notes by bifurcating the gross proceeds between the indebtedness, or liability component, and the embedded conversio
n option, or equity component.
This bifurcation was done by estimating an effective interest rate on the date of issuance for similar notes. The embedded conversion option was reco
rded in stockholders’ equity. Since the c
ompany did not exercise
the embedded conversion option
associated with the notes, pursuant to the guidance within ASC Topic 470,
Debt
, the c
ompany recorded a loss upon extinguishment measured by the difference between the fair value and carrying value of the
liability portion of the notes.
As a result, the company recorded a charge to interest expense in the consolidated financial statemen
ts of approximately
$1.3
million
during the th
ree months ended June 30, 2017.
This charge also included
$0.6
million of unamortized debt issuance costs related to the
principal balance extinguished.
The remaining settlement consideration
transferred was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of additional paid-in capital.
Covenant Compliance
The company was
in compliance with its debt covenants as of June 30, 2017.
Capitalized Interest
The
compa
ny
had $
12
thousand and
$23
thousand of capitalized
interest during the three and six months ended June 30, 2017, respectively, and
$559
thousand and
$917
thousand during the three and six months ended June 30, 2016, respectively.
Restricted Net Assets
At June 30, 2017, there were
approximately $
790.5
million of net asse
ts
at the company’s subsidiaries that could not be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit facilities of these subsidiaries
.
9
.
STOCK-BASED COMPENSATION
The company has an equity incentive plan that reserves
4
,
110
,000
shares of common stock for issuance to its directors and employees. The plan provides for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted and deferred stock unit awards, to be granted to eligible employees, non-employee directors and consultants.
The company measures stock-based compensation at fair value on the grant date, adjusted for estimated forfeitures. The company records noncash compensation expense related to equity awards in its consolidated financial statements over the requisite period on a straight-line basis. Substantially all of the existing stock-based compensation has been equity awards.
The activity related to the exercisable stock options for the
six months ended June 30, 2017
, is as follows:
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
148,750
|
|
$
|
12.36
|
|
2.8
|
|
$
|
2,305
|
Granted
|
-
|
|
|
-
|
|
-
|
|
|
-
|
Exercised
|
(5,000)
|
|
|
10.00
|
|
-
|
|
|
78
|
Forfeited
|
-
|
|
|
-
|
|
-
|
|
|
-
|
Expired
|
-
|
|
|
-
|
|
-
|
|
|
-
|
Outstanding at June 30, 2017
|
143,750
|
|
$
|
12.44
|
|
2.3
|
|
$
|
1,166
|
Exercisable at June 30, 2017
(1)
|
143,750
|
|
$
|
12.44
|
|
2.3
|
|
$
|
1,166
|
|
(1)
|
|
Includes in-the-money options
totaling
143,750
shares at a weighted-average exercise price of $
12.44
.
|
Option awards allow employees to exercise options through cash payment for the shares of common stock or simultaneous broker-assisted transactions in which the employee authorizes the exercise and immediate sale of the option
s
in the open market. The company uses newly issued shares of common stock to satisfy its stock-based payment obligations.
The
non-vested stock award and deferred stock unit activity for the
six months ended June 30, 2017
, is as follows:
|
|
|
|
|
|
|
|
Non-Vested
Shares and
Deferred Stock
Units
|
|
Weighted-
Average Grant-
Date Fair Value
|
|
Weighted-Average
Remaining
Vesting Term
(in years)
|
|
|
|
|
|
|
|
Non-Vested at December 31, 2016
|
1,139,560
|
|
$
|
17.65
|
|
|
Granted
|
531,103
|
|
|
24.38
|
|
|
Forfeited
|
(41,317)
|
|
|
19.07
|
|
|
Vested
|
(503,983)
|
|
|
18.42
|
|
|
Non-Vested at June 30, 2017
|
1,125,363
|
|
$
|
20.43
|
|
2.1
|
Green Plains Partners
Green Plains Partners has adopted the LTIP, an incentive plan intended to promote the interests of the partnership, its general partner and affiliates by providing incentive compensation based on units to employees, consultants and directors to encourage superior performance. The incentive plan reserves
2,500,000
common units for issuance in the form of options, restricted units, phantom units, distributable equivalent rights, substitute awards, unit appreciation rights, unit awards, profits interest units or other unit-based awards. The partnership measures unit-based compensation related to equity awards in its consolidated financial statements over the requisite service period on a straight-line basis.
The non-vested unit-based awards activity for the
six months ended June 30, 2017
, is as follows:
|
|
|
|
|
|
|
|
Non-Vested
Shares and
Deferred Stock
Units
|
|
Weighted-
Average Grant-
Date Fair Value
|
|
Weighted-Average
Remaining
Vesting Term
(in years)
|
|
|
|
|
|
|
|
Non-Vested at December 31, 2016
|
15,009
|
|
$
|
15.99
|
|
|
Granted
|
-
|
|
|
-
|
|
|
Forfeited
|
-
|
|
|
-
|
|
|
Vested
|
(15,009)
|
|
|
15.99
|
|
|
Non-Vested at June 30, 2017
|
-
|
|
$
|
-
|
|
0.0
|
Compensation
costs for stock-based and unit-based payment plans during the
three and six months ended June 30, 2017
,
were
approximately $
3.0
million and
$5.5
million
, respectively
, and
$
2.4
million and
$4.6
million during the three and six months ended June 30, 2016, respectively
.
At
June 30, 2017
, there
was
$
18.8
million of unrecognized
compensation costs
from stock-based and unit-based compensation related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of
approximately
2.1
years. The potential
tax benefit related to stock-based payment is
approximately
37.7
% of these
expe
nses
.
10. EARNINGS PER SHARE
Basic earnings per share, or EPS, is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.
During 2016, d
iluted EPS was computed using the treasury stock method
for the convertible debt instruments
, b
y dividing net income by the weighted
average number of common shares outstanding during the period, adjusted for the dilutive effect of the convertible debt instruments and any other outstanding dilutive securities. During the first quarter of 2017, the company changed its method for calculating dilutive EPS related to its convertible debt instruments from the treasury stock method to the if-converted method, as the company changed its financial strategy with respect to cash settlement of these instruments. As such, the company computed diluted EPS for 2017 by dividing net income on an if-converted basis, by the weighted average number of common shares outstanding during the period,
adjusted to include the shares that would be issued if the convertible debt instruments were converted to common shares and the
effect of any outstanding dilutive securities.
Under the if-converted method for 2017, excluded from the computation of diluted EPS were 10.6 million shares and 11.3 million shares for the three and six months ended June 30, 2017, respectively, and an adjustment to net income of $3.2 million and $6.8
million for
interest expense
, net of taxes, for the three and six months ended June 30, 2017, respectively, as the inclusion of these adjustments would have been antidilutive.
Also excluded from the calculation were 65 thousand shares and 68 thousand shares for the three and six months ended June 30, 2017, respectively,
and 119
thousand shares for the six months ended June 30, 2016
, related
to the effect of stock-based compensation awards, as inclusion of these shares would have been antidilutive.
The basic and diluted EPS are calculated as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Green Plains
|
$
|
(16,366)
|
|
$
|
8,191
|
|
$
|
(19,963)
|
|
$
|
(15,947)
|
Weighted average shares outstanding - basic
|
|
40,220
|
|
|
38,425
|
|
|
39,326
|
|
|
38,311
|
EPS - basic
|
$
|
(0.41)
|
|
$
|
0.21
|
|
$
|
(0.51)
|
|
$
|
(0.42)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Green Plains - diluted
|
$
|
(16,366)
|
|
$
|
8,191
|
|
$
|
(19,963)
|
|
$
|
(15,947)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic
|
|
40,220
|
|
|
38,425
|
|
|
39,326
|
|
|
38,311
|
Effect of dilutive convertible debt:
|
|
|
|
|
|
|
|
|
|
|
|
3.25% notes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
4.125% notes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Effect of dilutive stock-based compensation awards
|
|
-
|
|
|
111
|
|
|
-
|
|
|
-
|
Weighted average shares outstanding - diluted
|
|
40,220
|
|
|
38,536
|
|
|
39,326
|
|
|
38,311
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - diluted
|
$
|
(0.41)
|
|
$
|
0.21
|
|
$
|
(0.51)
|
|
$
|
(0.42)
|
1
1
. STOCKHOLDERS’ EQUITY
Components of stockholders’ equity are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accum.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Total
|
|
|
|
|
Additional
|
|
|
Comp.
|
|
Green Plains
|
Non-
|
Total
|
|
Common Stock
|
Paid-in
|
Retained
|
Income
|
Treasury Stock
|
Stockholders'
|
Controlling
|
Stockholders'
|
|
Shares
|
Amount
|
Capital
|
Earnings
|
(Loss)
|
Shares
|
Amount
|
Equity
|
Interests
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2016
|
46,079
|
$
|
46
|
$
|
659,200
|
$
|
283,214
|
$
|
(4,137)
|
7,715
|
$
|
(75,816)
|
$
|
862,507
|
$
|
116,684
|
$
|
979,191
|
Net income (loss)
|
-
|
|
-
|
|
-
|
|
(19,963)
|
|
-
|
-
|
|
-
|
|
(19,963)
|
|
9,818
|
|
(10,145)
|
Cash dividends and
distributions declared
|
-
|
|
-
|
|
-
|
|
(9,221)
|
|
-
|
-
|
|
-
|
|
(9,221)
|
|
(10,023)
|
|
(19,244)
|
Other comprehensive loss,
before reclassification
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,776)
|
-
|
|
-
|
|
(1,776)
|
|
-
|
|
(1,776)
|
Amounts reclassified from
accumulated other
comprehensive loss
|
-
|
|
-
|
|
-
|
|
-
|
|
(4,487)
|
-
|
|
-
|
|
(4,487)
|
|
-
|
|
(4,487)
|
Other comprehensive loss,
net of tax
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,263)
|
-
|
|
-
|
|
(6,263)
|
|
-
|
|
(6,263)
|
Exchange of 3.25%
convertible notes due
2018
|
-
|
|
-
|
|
18,326
|
|
-
|
|
-
|
(2,784)
|
|
27,356
|
|
45,682
|
|
-
|
|
45,682
|
Stock-based compensation
|
332
|
|
-
|
|
1,577
|
|
-
|
|
-
|
-
|
|
-
|
|
1,577
|
|
119
|
|
1,696
|
Stock options exercised
|
5
|
|
-
|
|
50
|
|
-
|
|
-
|
-
|
|
-
|
|
50
|
|
-
|
|
50
|
Balance, June 30, 2017
|
46,416
|
$
|
46
|
$
|
679,153
|
$
|
254,030
|
$
|
(10,400)
|
4,931
|
$
|
(48,460)
|
$
|
874,369
|
$
|
116,598
|
$
|
990,967
|
Amounts reclassified from accumulated other comprehensive income are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
Statements of
Operations
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Classification
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity derivatives
|
$
|
2,825
|
|
$
|
(13,470)
|
|
$
|
6,977
|
|
$
|
(13,225)
|
|
Revenues
|
Commodity derivatives
|
|
(648)
|
|
|
10,755
|
|
|
182
|
|
|
12,644
|
|
Cost of goods sold
|
Total
|
|
2,177
|
|
|
(2,715)
|
|
|
7,159
|
|
|
(581)
|
|
Income (loss) before
income taxes
|
Income tax expense (benefit)
|
|
824
|
|
|
(932)
|
|
|
2,672
|
|
|
(225)
|
|
Income tax expense
(benefit)
|
Amounts reclassified from accumulated
other comprehensive income (loss)
|
$
|
1,353
|
|
$
|
(1,783)
|
|
$
|
4,487
|
|
$
|
(356)
|
|
|