2024
Annual
Report
Selected
Financial Data
Statement of Operations Data
(in thousands, except per share information)
Year Ended December 31,
2024
2023
2022
Revenues
$2,458,796
$3,295,743
$ 3,662,849
Costs and expenses
2,506,255
3,357,321
3,761,797
Operating loss(1)
(47,459)
(61,578)
(98,948)
Total other income (expense)(2)
(23,839)
(20,771)
247
Net loss
(81,189)
(76,299)
(103,377)
Net loss attributable to Green Plains
$
(82,497)
$
(93,384)
$
(127,218)
Earnings per share:
Net loss attributable to Green Plains - basic and diluted
$
(1.29)
$
(1.59)
$
(2.29)
Other Data: (Non-GAAP)
Adjusted EBITDA (unaudited and in thousands)
$
18,715
$
45,506
$
(822)
Balance Sheet Data
(in thousands)
December 31,
2024
2023
2022
Cash and cash equivalents
$
173,041
$
349,574
$
444,661
Current assets
569,032
732,730
928,750
Total assets
1,782,174
1,939,322
2,123,131
Current liabilities
385,687
384,962
486,922
Long-term debt
432,460
491,918
495,243
Total liabilities
907,637
949,266
1,062,065
Stockholders’ equity
$
874,537
$ 990,056
$ 1,061,066
The following table reconciles net loss to adjusted EBITDA for the periods indicated:
Year Ended December 31,
(in thousands)
2024
2023
2022
Net loss
$
(81,189)
$
(76,299)
$
(103,377)
Interest expense
33,095
37,703
32,642
Income tax expense (benefit), net of equity method income taxes
5,153
(5,617)
4,747
Depreciation and amortization(3)
90,587
98,244
92,698
EBITDA
47,646
54,031
26,710
Other income(2)
—
(3,440)
(27,712)
Gain on sale of assets
(30,723)
(5,265)
—
Proportional share of EBITDA adjustments to equity method investees
1,792
180
180
Adjusted EBITDA
$
18,715
$
45,506
$
(822)
(1)
Operating loss for the fiscal year-ended 2024, 2023 and 2022, respectively, include an inventory lower of cost or net realizable value
adjustment of $2.1 million, $2.6 million and $12.3 million. Fiscal year-ended 2024 and 2023, respectively, include a $30.7 million and $4.1
million gain on sale of assets.
(2)
Other income for the fiscal year-ended 2023 and 2022, respectively, includes a grant received from the USDA related to the Biofuel
Producer Program of $3.4 million and $27.7 million.
(3)
Excludes the amortization of operating lease right-of-use assets and amortization of debt issuance costs.
Green Plains Inc. 2024 Annual Report
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
or
o 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
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x
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 x No o
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 x No o
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
x
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
o
Emerging growth company
o
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. o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of the company’s voting common stock held by non-affiliates of the registrant as of June 28, 2024 (the last
business day of the second quarter), based on the last sale price of the common stock on that date of $15.86, was approximately $1,000.7
million. For purposes of this calculation, executive officers and directors are deemed to be affiliates of the registrant.
As of February 4, 2025, there were 64,729,446 shares of the registrant’s common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the 2025 Annual Meeting of Shareholders are incorporated by reference in Part
III herein. The company intends to file such Proxy Statement with the Securities and Exchange Commission no later than 120 days after the
end of the period covered by this report on Form 10-K.
TABLE OF CONTENTS
Page
Commonly Used Defined Terms
2
PART I
Item 1.
Business.
5
Item 1A.
Risk Factors.
13
Item 1B.
Unresolved Staff Comments.
27
Item 1C.
Cybersecurity.
27
Item 2.
Properties.
28
Item 3.
Legal Proceedings.
28
Item 4.
Mine Safety Disclosures.
28
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
29
Item 6.
Reserved.
30
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
31
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
45
Item 8.
Financial Statements and Supplementary Data.
47
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
47
Item 9A.
Controls and Procedures.
47
Item 9B.
Other Information.
49
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
49
PART III
Item 10.
Directors, Executive Officers and Corporate Governance.
49
Item 11.
Executive Compensation.
49
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
49
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
49
Item 14.
Principal Accounting Fees and Services.
49
PART IV
Item 15.
Exhibits, Financial Statement Schedules.
50
Item 16.
Form 10-K Summary.
54
Signatures.
55
1
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
Nasdaq
The Nasdaq Global Market
SEC
Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
SOFR
Secured Overnight Financing Rate
Industry and Other Defined Terms:
ATJ
Alcohol-to-Jet
BlackRock
Funds and accounts managed by BlackRock
BTU
British Thermal Units
CARB
California Air Resources Board
CI
Carbon Intensity
COVID-19
Coronavirus Disease 2019
CST™
Clean Sugar Technology™
DOE
Department of Energy
E10
Gasoline blended with up to 10% ethanol by volume
E15
Gasoline blended with up to 15% ethanol by volume
E85
Gasoline blended with up to 85% ethanol by volume
EIA
U.S. Energy Information Administration
EPA
U.S. Environmental Protection Agency
EV
Electric Vehicle
FFV
Flexible-fuel vehicle
FSSC
Food Safety System Certification
GHG
Greenhouse gas
2
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
mmgy
Million gallons per year
MSC™
Maximized Stillage Co-products™ produced using process technology
developed by Fluid Quip Technologies
MTBE
Methyl tertiary-butyl ether
R&D tax credit
Research and development tax credit
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
TTB
Alcohol and Tobacco Tax and Trade Bureau
U.S.
United States
USDA
U.S. Department of Agriculture
3
Cautionary Statement Regarding Forward-Looking Statements
The SEC encourages companies to disclose forward-looking information so investors can better understand future
prospects and make informed investment decisions. As such, forward-looking statements are included in this report or
incorporated by reference to other documents filed with the SEC.
Forward-looking statements are made in accordance with safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements are based on current expectations that involve a number of risks and uncertainties and
do not relate strictly to historical or current facts, but rather to plans and objectives for future operations. These statements
may be identified by words such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “outlook,” “plan,”
“predict,” “may,” “could,” “should,” “will” and similar expressions, as well as statements regarding future operating or
financial performance or guidance, business strategy, environment, key trends and benefits of actual or planned acquisitions.
Factors that could cause actual results to differ from those expressed or implied in the forward-looking statements
include, but are not limited to, those discussed in this report under “Risk Factors” or incorporated by reference. Specifically,
we may experience fluctuations in future operating results due to a number of economic conditions and other factors,
including: the status, expected timing, and expected outcome of our Board of Directors' ongoing review of strategic
alternatives; the failure to realize the anticipated results from the new products being developed; the failure to realize the
anticipated costs savings or other benefits of the Merger; local, regional and national economic conditions and the impact
they may have on the company and its customers; disruption caused by health epidemics; conditions in the ethanol and
biofuels industry, including a sustained decrease in the level of supply or demand for ethanol and biofuels or a sustained
decrease in the price of ethanol or biofuels; competition in the ethanol industry and other industries in which we operate;
commodity market risks, including those that may result from weather conditions; the financial condition of the company’s
customers; any non-performance by customers of their contractual obligations; changes in customer, employee or supplier
relationships resulting from the merger; changes in safety, health, environmental and other governmental policy and
regulation, including changes to tax laws; risks related to acquisition and disposition activities and achieving anticipated
results; risks associated with merchant trading; risks related to our equity method investees; the results of any reviews,
investigations or other proceedings by government authorities; the performance of the company; and other factors detailed in
reports filed with the SEC.
We believe our expectations regarding future events are based on reasonable assumptions; however, these assumptions
may not be accurate or account for all risks and uncertainties. Consequently, forward-looking statements are not guaranteed.
Actual results may vary materially from those expressed or implied in our forward-looking statements. In addition, we are not
obligated and do not intend to update our forward-looking statements as a result of new information unless it is required by
applicable securities laws. We caution investors not to place undue reliance on forward-looking statements, which represent
management’s views as of the date of this report or documents incorporated by reference.
4
PART I
Item 1. Business.
References to “we,” “us,” “our,” “Green Plains,” or the “company” refer to Green Plains Inc. and its subsidiaries.
Overview
Green Plains is an Iowa corporation, founded in June 2004 as a producer of low-carbon fuels and has grown to be a
leading biorefining company maximizing the potential of existing resources through fermentation and patented agribusiness
technologies. We continue the transition from a commodity-processing business to a value-added agricultural technology
company creating lower carbon, high-value ingredients from existing resources. To that end, we are currently executing on a
number of initiatives to develop and implement proven agricultural, food and industrial biotechnology systems that allow for
product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as
Ultra-High Protein, low-CI dextrose, renewable corn oil and more, as well as offering these technologies to the broader
biofuels industry. We are a leader in deploying carbon capture technology to reduce the CI of our biofuels at several of our
production facilities.
We group our business activities into the following two operating segments to manage performance:
•
Ethanol Production. Our ethanol production segment includes the production, storage and transportation of ethanol,
distillers grains, Ultra-High Protein and renewable corn oil at ten biorefineries in Illinois, Indiana, Iowa, Minnesota,
Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 310 million bushels of
corn per year and producing approximately 903 million gallons of ethanol, 2.2 million tons of distillers grains and
Ultra-High Protein, and 310 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel, renewable
diesel and sustainable aviation fuel. We are one of the largest ethanol producers in North America.
•
Agribusiness and Energy Services. Our agribusiness and energy services segment includes grain procurement, with
approximately 20.2 million bushels of grain storage capacity, and our commodity marketing business, which
markets, sells and distributes the ethanol, distillers grains and renewable corn oil produced at our ethanol plants. We
also market ethanol for a third-party producer as well as buy and sell ethanol, distillers grains, renewable corn oil,
grain, natural gas and other commodities in various markets.
Business Strategy
Ethanol is a valuable low CI oxygenate that comprises approximately 10.1% of the domestic surface transportation
gasoline supply in the U.S. with the potential to grow with increased offering of higher blends, including E15 and E85.
Additionally, government incentives to produce SAF through ATJ pathways could provide additional demand for low-CI
ethanol for conversion to SAF. A critical step to significantly reduce the CI of ethanol is carbon capture technology, which
we are deploying at multiple locations.
As part of our carbon reduction strategy, we committed our seven biorefineries in Nebraska, Iowa and Minnesota to
carbon capture and sequestration projects through carbon pipeline transport, our four Iowa and Minnesota facilities with
Summit Carbon Solutions and our three Nebraska biorefineries with Trailblazer CO2 Pipeline LLC, which will lower GHG
emissions through the capture of biogenic carbon dioxide at each of these biorefineries, significantly lowering their CI, in
some cases by more than half. We have executed agreements for the future purchase, financing and installation of carbon
capture equipment at our three Nebraska plants. We anticipate completion of these Nebraska biorefinery carbon capture
projects in the second half of 2025, and Summit Carbon Solutions intends to be operational in 2027. There are very few
ethanol production facilities with carbon capture in place today, and we believe we may be among the first to produce lower-
CI ethanol at scale. In addition, we are exploring alternative options for biogenic carbon dioxide utilization where pipeline
transport or direct injection may not be feasible. Reducing the CI of our ethanol could allow us to benefit from state, federal
and foreign clean fuel programs, including LCFS programs at the state level and federal tax credits under the IRA, including
the 45Z Clean Fuel Production Credit, and could position our low-carbon ethanol as a potential feedstock for ATJ pathways
to produce SAF.
SAF is a drop-in fuel, chemically identical to petroleum-based jet fuel and can be blended into the fuel supply at varying
levels. There is an increasing focus on using this fuel to reduce the carbon footprint of air travel. SAF can be produced from
vegetable and waste oil feedstocks, such as our renewable corn oil. Additionally, ATJ technologies are emerging and being
5
commercialized that use low-CI ethanol as a feedstock to produce SAF. In January 2023, Green Plains, United Airlines and
Tallgrass formed a joint venture, Blue Blade Energy, to explore development and commercialization of ATJ SAF.
We believe that global demand for protein will continue to rise, requiring larger amounts of high protein feed for pets,
livestock and aquaculture. While faced with growing competition from expanded U.S. soy crushing capacity, our
transformation aims to capitalize on this market insight, in an effort to capture higher co-product returns and reduce the
volatility of earnings.
As part of our transformation to a value-added agricultural technology company, we began producing Ultra-High Protein
using FQT's MSC™ technology in 2020 and have deployed this technology across half of our biorefinery locations, in
addition to one joint venture, to help meet growing demand for protein feed ingredients and low-carbon renewable corn oil to
use as a feedstock for producing advanced biofuels such as renewable diesel, biodiesel and SAF, as the MSC™ technology
enhances renewable corn oil yields. The biorefineries producing Ultra-High Protein, a feed ingredient with protein
concentrations of 50% or greater and yeast concentrations of 25%, have also increased renewable corn oil yields. We
repeatedly demonstrated full scale 60% protein production runs using FQT's MSC™ system, which we have branded as
Sequence™. We market this specialty feed ingredient to aquaculture customers globally. Our 50/50 joint venture with
Tharaldson Ethanol Plant I LLC (Tharaldson Ethanol) owns the MSC™ technology assets added adjacent to the Tharaldson
Ethanol plant in Casselton, North Dakota which produces Ultra-High Protein and increases renewable corn oil yields. We
share in the protein and renewable corn oil uplift, with no additional exposure to the Tharaldson Ethanol production. These
assets completed commissioning and shipped the first commercial quantities during the second quarter of 2024. Including GP
Turnkey Tharaldson's capacity, the annual Ultra-High Protein capacity we market is approximately 430 thousand tons.
In September 2022, we broke ground at our biorefinery in Shenandoah, Iowa, as the first location to deploy FQT's
CST™ at commercial scale, and during 2024 the company achieved successful ongoing production of dextrose syrups with
CST™. FQT’s CST™ allows for the production of both food and industrial grade low-carbon glucose and dextrose at a dry
mill ethanol plant to target applications in food production, in addition to serving as a feedstock for renewable chemicals and
synthetic biology. The facility is currently capable of producing 60 million pounds of product per year, and we anticipate
modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated demand.
We also pursue innovation and new business opportunities through a variety of ventures. In July 2023, we announced a
technology collaboration with Equilon Enterprises LLC, which allows us to use FQT’s precision separation and processing
technology with Shell Fiber Conversion Technology. The two technologies combine fermentation, mechanical separation and
processing, and fiber conversion into one platform. This has the potential to liberate all of the remaining distillers corn oil
currently bound in the fiber fraction of the corn kernel, generate cellulosic sugars for production of low-carbon ethanol, and
enhance and expand available high protein to produce high-quality ingredients for global pet, livestock and aquaculture diets.
Our collaboration completed the construction of a large demonstration facility at Green Plains York and began
commissioning during 2024.
Competitive Strengths
We are focused on managing commodity price risks, improving operational and transportation efficiencies and
optimizing market opportunities to create an efficient platform with diversified income streams. Our competitive strengths
include:
Disciplined Risk Management. Risk management is a core competency and we use a variety of sophisticated risk
management tools and hedging strategies to maintain a disciplined approach. Our internally developed operating margin
management system allows us to monitor commodity price risk exposure in the spot market and on the forward curve at each
of our operations and helps us to lock in favorable margins, when available, or if appropriate, temporarily reduce production
during periods of compressed margins.
Technology Integration. Over our history, we have incorporated new technologies like renewable corn oil extraction and
Selective Milling Technology™ into our manufacturing processes that have enabled us to run more efficiently and improve
our yields and financial results. We completed a modernization and upgrade initiative at four facilities in 2021 and two
additional facilities in 2022, resulting in improved operational reliability and reductions in natural gas, electricity and water
usage, decreasing our operating expenses and carbon footprint. Through our ownership of FQT and other partnerships, we are
currently undergoing a number of initiatives to further improve operational efficiencies that we intend to lead to improved
margins.
6
Our transformation into a sustainable ingredient producer continues centering around FQT's MSC™ and CST™
technologies, in addition to carbon capture technology. These technologies enhance our ability to produce lower CI, value-
added ingredients, while expanding renewable corn oil yields.
FQT provides additional intellectual property rights, including those aimed at developing and implementing proven,
value-added agriculture, food and industrial biotechnology systems, CST™ and MSC™, as well as engineering expertise for
designing ethanol facilities with lower energy use, operational expenses and carbon intensity. We continue to evaluate
additional technological opportunities to expand our capabilities and product offerings in the coming years.
Proven Leadership Team. Our senior leadership team has specific expertise across all of our businesses, including plant
operations and management, commodity markets and risk management, quality assurance, quality control, ingredient
nutrition, marketing and innovation, regulatory, legal, policy, and ethanol marketing and distribution. Our leadership team’s
level of operational and financial expertise is essential to successfully executing our business strategies.
Operational Excellence. Our facilities are operated by skilled and experienced personnel who are encouraged to
collaborate and share knowledge and expertise across business segments and locations. We remain committed to driving
continuous operational improvements, leveraging advanced systems that provide real-time production data to monitor
production activity and optimize performance.
Risk Management and Hedging Activities
Our margins are highly dependent on commodity prices, particularly for ethanol, corn, distillers grains, Ultra-High
Protein, renewable corn oil and natural gas. Since market price fluctuations among these commodities are not always
correlated, ethanol production has been and may continue to be unprofitable at times. From time to time, we use a variety of
risk management tools and hedging strategies to monitor real-time operating price risk exposure at each of our operations in
an effort to obtain favorable margins, when available.
As market conditions warrant, we use forward contracts to sell a portion of our ethanol, distillers grains, Ultra-High
Protein and renewable corn oil production or buy some of the corn, natural gas, or ethanol we need to partially offset
commodity price volatility. We also engage in other hedging transactions involving exchange-traded futures contracts for
corn, natural gas, ethanol, soybean meal, soybean oil and other agricultural and energy commodities. The financial impact of
these activities depends on the price of the commodities involved and our ability to physically receive or deliver those
commodities.
Hedging arrangements expose us to risk of financial loss when the counterparty defaults on its contract or, in the case of
exchange-traded contracts, when the expected differential between the price of the underlying commodity and physical
commodity changes. Hedging activities can result in losses when a position is purchased in a declining market or sold in a
rising market. Hedging losses may be offset by a decreased cash price for corn and natural gas and an increased cash price for
ethanol, distillers grains, Ultra-High Protein and renewable corn oil. Depending on the circumstance, we vary the amount of
hedging or other risk mitigation strategies we undertake and sometimes choose not to engage in hedging or risk management
transactions at all.
Recent Developments
The following is a summary of our significant recent developments. Additional information about these items can be
found elsewhere in this report or in previous reports filed with the SEC.
Clean Sugar Technology
The company has achieved successful ongoing production of dextrose syrups with CST™ at its Shenandoah facility. The
syrups produced with CST™ have proven successful in trials as feedstocks for fermentation of various bio-products and bio-
chemicals, in addition to food ingredients. The facility is currently capable of producing 60 million pounds of product per
year. The company is going through final product approvals with multiple potential customers and anticipates receiving final
7
FSSC certification during the first quarter of 2025.
Idling of Fairmont, Minnesota Plant
In January 2025, the company idled its 119 million gallon ethanol plant in Fairmont, Minnesota as a result of persistent
margin pressures, and the majority of the staff was terminated. The facility remains on track for carbon capture and
sequestration coming online in 2027 which would fundamentally reshape the economics of the facility. The company will
continue to monitor the potential margin available to determine any changes to future operations.
Strategic Review
As previously announced, the company initiated a strategic review process in February 2024 to explore a broad range of
opportunities to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or
sale, partnerships and financings. The Board of Directors continues to progress the strategic review process, working with its
financial advisors, BMO Capital Markets Corp. and Moelis & Company, and legal advisors Vinson & Elkins LLP. As part of
the strategic review process, in early 2025, the company idled its Fairmont, Minnesota facility and launched a corporate
reorganization and cost reduction initiative that will significantly reduce selling, general and administrative expenses on an
ongoing basis. As part of this initiative, the company has identified early in 2025 approximately $30 million of financial
improvement annually, inclusive of savings from idling the Fairmont facility and realigning corporate and trade group selling,
general and administrative functions to reflect current strategic priorities, and is continuing to identify more opportunities that
may reduce selling, general and administrative functions further. As a result of the reorganization, the company expects to
take a one-time charge in the first quarter of 2025 of approximately $5 million to $7 million based on current estimates. There
is no deadline or definitive timetable for completion of the strategic review process, and there can be no assurances that the
process will result in a transaction or any other outcome. The company does not intend to make any further public comment
regarding the review until the Board has approved a specific action or otherwise determines that additional disclosure is
appropriate or required.
Departures
As part of the company’s selling, general and administrative rationalization initiatives, the position of EVP-Commercial
Operations was eliminated, effective February 6, 2025. Mr. Kadavy entered into Separation Agreements with usual and
customary terms and received total compensation of $1,061,458 under the terms of his separation agreement and employment
agreement, as amended, which includes amounts related to vested shares, with performance share awards vesting at target.
Birmingham Terminal
On September 30, 2024, the company completed the sale of the terminal located in Birmingham, Alabama and certain
related assets and transfer of liabilities (the "Birmingham Transaction") for a sale price of $47.5 million, plus working capital
of $1.2 million. The company recorded a pretax gain on the sale of $30.7 million. The proceeds from the sale were used to
repay the outstanding balance of the Green Plains Partners term loan due July 20, 2026. Refer to Note 4 – Merger and
Dispositions in the notes to the consolidated financial statements included herein for more information.
The Partnership Merger
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. During the
fourth quarter of 2024, the partnership was dissolved. Refer to Note 4 – Merger and Dispositions in the notes to the
consolidated financial statements included herein for more information.
Operating Segments
Ethanol Production Segment
Industry Overview. Ethanol, also known as ethyl alcohol or grain alcohol, is a colorless liquid produced by fermenting
carbohydrates found in a number of different types of grains, such as corn, wheat and sorghum, and other cellulosic matter
found in plants. Most of the ethanol produced in the United States is made from corn, which can be handled efficiently and is
in greater supply than other grains. Corn contains large quantities of carbohydrates that convert into glucose more easily than
most other kinds of biomass. According to the USDA, on average, a 56 pound bushel of corn produces approximately 2.9
gallons of ethanol, 17 pounds of dried distillers grains and 0.6 pounds of corn oil. Outside of the United States, sugarcane is
the primary feedstock used to produce ethanol.
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Ethanol is a significant component of the biofuels industry, which includes all transportation fuels derived from
renewable biological materials. Ethanol is an excellent oxygenate and source of octane. When added to petroleum-based
transportation fuels, oxygenates reduce vehicle emissions. Ethanol is the most economical oxygenate and source of octane
available on the market and its production costs are competitive with gasoline.
Ethanol Plants. We operate ten ethanol plants, located in six states, that produce ethanol, distillers grains, Ultra-High
Protein and renewable corn oil.
Plant Location
Plant Production
Capacity (mmgy)
Central City, Nebraska (1) (2)
116
Fairmont, Minnesota (3) (4)
119
Madison, Illinois
90
Mount Vernon, Indiana (1)
90
Obion, Tennessee (1)
120
Otter Tail, Minnesota (3)
55
Shenandoah, Iowa (1) (3)
82
Superior, Iowa (3)
60
Wood River, Nebraska (1) (2)
121
York, Nebraska (2)
50
Total
903
(1)
Produces Ultra-High Protein.
(2)
Committed to Tallgrass Trailblazer Pipeline.
(3)
Committed to Summit Carbon Solutions Pipeline.
(4)
Plant idled in January 2025.
Our business is directly affected by the supply and demand for ethanol and other fuels in the markets served by our
assets. Miles driven typically increase during the spring and summer months related to vacation travel, followed closely by
the fall season due to holiday travel.
Corn Feedstock and Ethanol Production. Our plants use corn as feedstock in a dry mill ethanol production process. Each
of our plants requires on average approximately 31 million bushels of corn annually, depending on its production capacity.
The price and availability of corn are subject to significant fluctuations driven by a number of factors that affect commodity
prices in general, including crop conditions, weather, governmental programs, freight costs and global demand. Ethanol
producers are generally unable to pass increased corn costs to customers.
Our corn supply is obtained primarily from local markets. We use cash and forward purchase contracts with grain
producers and elevators to buy corn. We maintain direct relationships with local farmers, grain elevators and cooperatives,
which serve as our primary sources of grain feedstock for all ten of our ethanol plants. This allows us to purchase much of the
corn we need directly from farmers throughout the year. Each of our plants is also situated on rail lines or has other logistical
solutions to access corn supplies from other regions of the country should local supplies become insufficient.
Corn is received at the plant by truck or rail then weighed and unloaded into a receiving building. Grain storage facilities
are used to inventory grain that is passed through a scalper to remove rocks and debris prior to processing. The corn is then
transported to a hammer mill where it is ground into flour and conveyed into a slurry tank for enzymatic processing. Water,
heat and enzymes are added to convert the complex starch molecules into simpler carbohydrates. The slurry is heated to
reduce the potential of microbial contamination and pumped into a liquefaction tank where additional enzymes are added.
Next, the grain slurry is pumped into fermenters, where yeast, enzymes, and nutrients are added and the fermentation process
is started. A beer column, within the distillation system, separates the alcohol from the spent grain mash. The alcohol is
dehydrated to 200-proof alcohol and either pumped into a holding tank and blended with approximately 2% denaturant as it is
pumped into finished product storage tanks, or marketed as industrial or undenatured ethanol.
Distillers Grains. The spent grain mash is pumped from the beer column into a decanter-type centrifuge for dewatering.
The water, or thin stillage, is pumped from the centrifuge into an evaporator, where it is concentrated into a thick syrup. The
solids, or wet cake, that exit the centrifuge are conveyed to the dryer system and dried at varying temperatures to produce
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distillers grains. Syrup is reapplied to the wet cake prior to drying to provide additional nutrients. Distillers grains, the
principal co-product of the ethanol production process, are used as mid-protein, high-energy animal feed and marketed to the
dairy, beef, swine and poultry industries.
We can produce three forms of distillers grains, depending on the number of times the solids are passed through the dryer
system:
•
wet distillers grains, which contain approximately 65% to 70% moisture, have a shelf life of approximately three
days and is therefore sold to dairies or feedlots within the immediate vicinity of our plants;
•
modified wet distillers grains, which is dried further to approximately 50% to 55% moisture, have a shelf life of
approximately three weeks and are marketed to regional dairies and feedlots; and
•
dried distillers grains, which have been dried more extensively to approximately 10% to 12% moisture, have an
almost indefinite shelf life and may be stored, sold and shipped to any market.
Ultra-High Protein. Ultra-High Protein is corn fermented protein produced by further processing of the spent grain mash
from the beer column. The spent grain is processed using FQT’s MSC™ technology, which contains a series of screening
equipment to remove fiber from the spent grain which is sent to the distillers grain dryer. The remaining product is washed
and clarified into a wet protein stream which is dried in a ring dryer to produce Ultra-High Protein meal with protein
concentrations of approximately 50%. Our new specialty feed ingredient, Sequence™ has protein concentrations of
approximately 60%.
Renewable Corn Oil. Renewable corn oil systems extract non-edible renewable corn oil from the thin stillage
evaporation process immediately before the production of distillers grains. Renewable corn oil is produced by processing the
syrup through a decanter-style, or disk-stack, centrifuge. The centrifuges separate the relatively light renewable corn oil from
the heavier components of the syrup. Across our entire platform, we extract on average approximately 1.0 pound of
renewable corn oil per bushel of corn used to produce ethanol. Industrial uses for renewable corn oil are primarily as a
feedstock for renewable diesel and biodiesel. Additionally, it is also used as a livestock feed additive.
Natural Gas. Depending on production parameters, our ethanol plants use on average approximately 28,000 BTUs of
natural gas per gallon of production. We have service agreements to acquire the natural gas we need and transport the gas
through pipelines to our plants.
Electricity. Our plants require on average approximately 0.9 kilowatt hours of electricity per gallon of production. Local
utilities supply the necessary electricity to all of our ethanol plants.
Water. While some of our plants satisfy a majority of their water requirements from wells located on their respective
properties, each plant also obtains drinkable water from local municipal water sources. Each facility either uses city water or
operates a filtration system to purify the well water that is used for its operations. Local municipalities supply all of the
necessary water for our plants that do not have onsite wells. Most of the water used in an ethanol plant is recycled in the
production process.
Transportation, Delivery and Terminal Services. Most of our ethanol plants are situated near major highways or rail lines
to ensure efficient product movement. Deliveries within 150 miles of our plants and the fuel terminal facility are generally
transported by truck. Deliveries to distant markets are shipped using major U.S. rail carriers that can switch cars to other
major railroads, allowing our plants to ship product throughout the United States and to international export terminals. As of
December 31, 2024, the leased railcar fleet consisted of approximately 2,080 ethanol railcars with an aggregate capacity of
61.8 mmg, and 1,000 hopper and tank cars to transport other co-products and raw materials. We expect the railcar volumetric
capacity to fluctuate over the normal course of business as the existing railcar leases expire and we enter into or acquire new
railcar leases. The company owns and operates one fuel terminal with a storage capacity of approximately 180 thousand
gallons and throughput capacity of approximately 40 mmgy.
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Agribusiness and Energy Services Segment
Our agribusiness and energy services segment includes grain storage at our ethanol plants of approximately 20.2 million
bushels, detailed in the following table:
Facility Location
On-Site Grain Storage Capacity
(thousands of bushels)
Central City, Nebraska
1,400
Fairmont, Minnesota (1)
1,611
Madison, Illinois
1,015
Mount Vernon, Indiana
1,034
Obion, Tennessee
8,168
Otter Tail, Minnesota
628
Shenandoah, Iowa
886
Superior, Iowa
1,770
Wood River, Nebraska
3,293
York, Nebraska
363
Total
20,168
(1)
Plant idled in January 2025.
We buy bulk grain, primarily corn, from area producers, and provide grain drying and storage services to those
producers. The grain is used as feedstock for our ethanol plants. Bulk grain commodities are traded on commodity exchanges
and inventory values are affected by changes in these markets. To mitigate risks related to market fluctuations from purchase
and sale commitments of grain, as well as grain held in inventory, we enter into exchange-traded futures and options
contracts that function as economic and designated accounting hedges at times.
Seasonality is present within our agribusiness operations. The fall harvest period typically results in higher handling
margins and stronger financial results during the fourth quarter of each year.
Through Green Plains Trade, we provide marketing services for our ten ethanol plants for all of the co-products produced
at these locations as well as market ethanol for a third party and also provide marketing services to our ethanol plants for
natural gas procurement.
We market the ethanol we and a third party produce to local, regional, national and international customers. We also
purchase ethanol from independent producers for pricing arbitrage. We sell to various markets under sales agreements with
integrated energy companies; retailers, traders and resellers in the United States and buyers for export to Brazil, Canada,
Philippines, India, Europe and other international markets. Under these agreements, ethanol is priced under both fixed and
indexed pricing arrangements.
We market distillers grains to local, domestic and international markets through Green Plains Trade. The bulk of our
demand is delivered to geographic regions that do not have significant local corn, distillers grains or high protein ingredients
production. We sell to international markets indirectly through exporters. Access to diversified markets allows us to sell
product to customers offering the highest net price.
Our renewable corn oil is sold primarily to renewable diesel and biodiesel plants and, to a lesser extent, feedlot and
poultry markets. We transport our renewable corn oil by truck to locations in a close proximity to our ethanol plants primarily
in the southeastern and midwestern regions of the United States. We also transport renewable corn oil by rail and barges to
national markets as well as to exporters for shipment on vessels to international markets.
We provide marketing services of natural gas to our ethanol plants including the procurement of both the pipeline
capacity and natural gas. We also enhance the value by aggregating volumes at various storage facilities which can be sold to
either the plants or various intermediary markets and end markets.
For more information about our segments, refer to Item 7. - Management’s Discussion and Analysis of Financial
Condition and Results of Operations in this report.
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Our Competition
Domestic Ethanol Competitors
We are one of the largest consolidated owners of ethanol plants in the United States. We compete with other domestic
ethanol producers in a highly fragmented industry. Our competitors also include plants owned by farmers, cooperatives, oil
refiners and retail fuel operators. These competitors may continue to operate their plants even when market conditions are not
favorable due to the benefits realized from their other operations.
As of December 31, 2024, the top four producers accounted for approximately 39% of the domestic production capacity
with production capacities ranging from 903 mmgy to 3,015 mmgy. Demand for corn from ethanol plants and other corn
consumers exists in all areas and regions in which we operate. According to the Renewable Fuels Association, there were 117
operational plants in Illinois, Indiana, Iowa, Minnesota, Nebraska and Tennessee, which are the states where we have
production facilities as of December 31, 2024. The largest concentration of operational plants is located in Iowa, Nebraska
and Illinois, where approximately 50% of all operational production capacity is located.
Foreign Ethanol Competitors
We also compete globally with production from other countries. Brazil is the second largest ethanol producer in the
world after the United States. Brazil primarily produces ethanol made from sugarcane, which may be less expensive to
produce than ethanol made from corn depending on feedstock prices. Under the RFS, certain parties are obligated to meet an
advanced biofuel standard, and Brazilian sugarcane ethanol qualifies as an advanced biofuel. Any significant additional
ethanol production capacity, or reduced demand for gasoline, could create excess supply in world markets, resulting in lower
ethanol prices throughout the world, including the United States.
Other Competition
Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development. Ethanol
production technologies also continue to evolve. We anticipate changes could occur primarily in the area of cellulosic
ethanol, or from biodigesters at landfills or livestock production facilities. Since all of our plants are designed as single-
feedstock facilities, adapting our plants for a different feedstock or process system would require additional capital
investments and retooling which could be cost prohibitive, and would require new RFS pathways to be approved by the EPA.
Our distillers grains and Ultra-High Protein feed ingredients compete against other feed ingredients including soybean meal,
canola meal, ground corn, corn gluten meal and distillers grains from other ethanol producers domestically and abroad. Our
distillers corn oil competes against vegetable oils such as soybean oil, canola oil, and to some extent palm oil, as well as
waste feedstocks including used cooking oil, animal fats and tallow.
Regulatory Matters
Government Ethanol Programs and Policies
We are sensitive to domestic and foreign governmental policies that impact ethanol, feedstocks for renewable fuels and
decarbonization, which in turn may impact the volume of ethanol and other ingredients we produce. Legislation and
regulatory rule making at the federal, state and international level can impact us across all business segments. Refer to Item 7.
- Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report for a detailed
discussion of these topics.
Environmental and Other Regulation
Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol,
crude oil and other liquid hydrocarbon materials. Compliance with existing and anticipated environmental laws and
regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate and
upgrade equipment and facilities. Our business may also be impacted by domestic and foreign government policies, such as
clean fuel programs, tariffs, duties, subsidies, import and export restrictions and outright embargos.
Human Capital Resources
Attracting, retaining and developing talented employees is essential to our success. We accomplish this, in part, by our
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competitive compensation practices, training initiatives, and growth opportunities within the company. On December 31,
2024, we had 923 full-time, part-time, temporary and seasonal employees, including 144 employees at our corporate office in
Omaha, Nebraska.
Workforce Health and Safety
We prioritize workplace safety through a comprehensive safety program that continuously assesses and enhances our
protocols to maintain a safe and secure environment for our employees.
Compensation and Benefits
As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation
and benefit programs for our employees in order to attract and retain superior talent. In addition to competitive base wages,
additional programs include the 2019 Equity Incentive Plan, a company-matched 401(k) Plan, healthcare and insurance
benefits, flexible spending accounts, paid time off, bonding leave, and employee assistance programs.
Available Information
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports are available on our website at www.gpreinc.com shortly after we file or furnish the information with the SEC.
You can also find the charters of our audit, compensation and nominating committees, as well as our code of ethics in the
corporate governance section of our website. The information found on our website is not part of this or any other report we
file with or furnish to the SEC. Alternatively, investors may visit the SEC website at www.sec.gov to access our reports,
proxy and information statements filed with the SEC.
Item 1A. Risk Factors.
We operate in an industry that has numerous risks, many of which are beyond our control or are driven by factors that
cannot always be predicted. Investors should carefully consider all of the risk factors in conjunction with the other
information included in this report as our financial results and condition or market value could be adversely affected if any of
these risks were to occur.
Risks Related to our Business and Industry
Our margins are dependent on managing the spread between the price of corn, natural gas, ethanol, distillers grains, Ultra-
High Protein and renewable corn oil.
Our operating results are highly sensitive to the spread between the corn and natural gas we purchase, and the ethanol,
distillers grains, Ultra-High Protein and renewable corn oil we sell. Price and supply are subject to various market forces,
such as weather, domestic and global supply and demand, global political or economic issues, including but not limited to the
war in Ukraine including sanctions associated therewith, other global conflicts, shortages, export prices, crude oil prices,
currency valuations and government policies in the United States and around the world, over which we have no control. Price
volatility of these commodities may cause our operating results to fluctuate substantially. Increases in corn or natural gas
prices or decreases in ethanol, distillers grains, Ultra-High Protein and renewable corn oil prices may make it unprofitable to
operate. No assurance can be given that we will purchase corn and natural gas or sell ethanol, distillers grains, Ultra-High
Protein and renewable corn oil at or near prices which would provide us with positive margins. Consequently, our results of
operations and financial position may be adversely affected by increases in corn or natural gas prices or decreases in ethanol,
distillers grains, Ultra-High Protein and renewable corn oil prices. We have made significant investments in our biorefinery
platform to produce Ultra-High Protein, and our financial results are increasingly dependent on our ability to operate these
new systems consistently and to sell the products into new markets at a premium to distillers grains. Rapid expansion of
soybean crushing capacity to meet the soybean oil demands of the growing renewable diesel and biomass-based diesel
industry could result in an oversupply of soybean meal, which could depress prices for various protein feed ingredients, and
negatively impact our anticipated financial returns.
We continuously monitor the margins at our ethanol plants using a variety of risk management tools and hedging
strategies when appropriate. Should our combined revenue from ethanol, distillers grains, Ultra-High Protein and renewable
corn oil fall below our cost of production, we could decide to slow or suspend production at some or all of our ethanol plants,
which could also adversely affect our results of operations and financial position.
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The products we buy and sell are subject to price volatility and uncertainty.
Our operating results are highly sensitive to commodity prices.
Corn. We are generally unable to pass increased corn costs to our customers since ethanol competes with other fuels. We
continue to see considerable volatility in corn prices. Ethanol plants, livestock industries and other corn-consuming
enterprises put significant price pressure on local corn markets. In addition, local corn supplies and prices could be adversely
affected by, but not limited to: prices for alternative crops, increasing pricing for seed corn, fertilizers, crop protection
products and other input costs; changes in government policies, including crop insurance, conservation programs, regulation
of farmland, and other regulations; shifts in global supply and demand; global political or economic issues, including but not
limited to the war in Ukraine including sanctions associated therewith; other global conflicts; and global or regional growing
conditions, such as plant disease, pests or adverse weather, including drought.
Ethanol. Our revenues are dependent on market prices for ethanol which can be volatile as a result of a number of
factors, including but not limited to: the price and availability of competing fuels and oxygenates for fuels; the domestic and
global supply and demand for ethanol, gasoline and corn; the price of gasoline, crude oil and corn; global political or
economic issues, including but not limited to the war in Ukraine including sanctions associated therewith, other global
conflicts; and domestic and foreign government policies that impact the supply, demand and pricing of corn, crude oil,
gasoline, ethanol and other liquid fuels.
Ethanol is marketed as a fuel additive that reduces vehicle emissions, an economical source of octane and, to a lesser
extent, as a gasoline substitute through higher blends such as E15 and E85. Consequently, gasoline supply and demand can
affect the price of ethanol. Should gasoline prices or demand change significantly, our results of operations could be
materially impacted.
Ethanol imports also affect domestic supply and demand. Imported ethanol is not subject to an import tariff and, under
the RFS, sugarcane ethanol from Brazil can be used as a means for obligated parties to meet the advanced biofuel standard in
addition to state level low-carbon fuel standards. Brazil is also rapidly expanding corn and corn ethanol production, which
can have a lower CI score if it is produced from the second crop or “Safrinha” crop, which could be imported into the U.S. or
displace our exports elsewhere globally.
Distillers Grains. Distillers grains compete with other protein-based animal feed products. Downward pressure on other
commodity prices, such as corn, wheat, soybeans, soybean meal, and other feed ingredients, will generally cause the price of
competing animal feed products to decline, resulting in downward pressure on the price of distillers grains. Occasionally, the
price of distillers grains will lag behind fluctuations in corn or other feedstock prices, lowering our cost recovery percentage.
Additionally, exports of distiller grains could be impacted by the enactment of foreign policy, or expanded production of
soybean meal or distillers grains elsewhere.
Natural Gas. The price and availability of natural gas are subject to volatile market conditions. These market conditions
are often affected by factors beyond our control, such as weather, drilling economics, overall economic conditions and
government regulations. Significant disruptions in natural gas supply could impair our ability to produce ethanol.
Furthermore, increases in natural gas prices or changes in our cost relative to our competitors cannot be passed on to our
customers, which may adversely affect our results of operations and financial position.
Ultra-High Protein. Our Ultra-High Protein has unique nutritional advantages and a higher protein concentration than
soybean meal and can be included in a variety of feed rations in the pet, dairy, swine, poultry and aquaculture industries. As a
value-added feed ingredient, quality control is imperative. Demand for feed products and pricing pressure from competing
feed products may result in downward pressure on the price of Ultra-High Protein. Reliable production of Ultra-High Protein
from both consistent operations of the biorefinery as well as the MSC™ technology is necessary to produce anticipated
volumes. Changes in our customers willingness to accept these ingredients, inconsistency in production volumes, quality or
downward pressure on prices could result in adverse impact on our business and profitability.
Renewable Corn Oil. Renewable corn oil is generally marketed as a low-carbon feedstock for biofuel production
including renewable diesel, biodiesel and currently to a lesser extent, sustainable aviation fuel; therefore, the price of
renewable corn oil is largely driven by demand for renewable diesel and biodiesel. Expanded demand from the renewable
diesel and biodiesel industry due to the extended blending tax credit, new tax credits included in the IRA and growing LCFS
markets in California, Oregon, Washington state or Canada, as well as customer acceptance for such fuels could impact
renewable corn oil demand. In general, renewable corn oil prices follow the prices of heating oil and soybean oil, though
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LCFS programs incentivize the lower CI of renewable corn oil as a feedstock relative to soybean oil. Federal incentives for
sustainable aviation fuel also provide higher credit values for lower CI. Other feedstocks such as used cooking oil and animal
fats and tallows are scored at a lower CI than renewable corn oil under most life cycle assessment models, and these
feedstocks may be preferred to renewable corn oil. Increased imports of used cooking oil could pressure all vegetable oil
values lower. Decreases in the price of or demand for renewable corn oil could have an adverse impact on our business and
profitability. While we believe our investments in MSC™ and other technologies have allowed us to capture more renewable
corn oil from each bushel, these yields could be negatively impacted by any number of factors.
We may be affected by or unable to fulfill our total transformation strategies.
We continually evaluate the makeup of our portfolio, and we may sell additional assets or businesses or exit particular
markets that are no longer a strategic fit or no longer meet their growth or profitability targets. Depending on the nature of the
assets sold, our profitability may be impacted by lost operating income or cash flows from such businesses. In addition,
divestitures we complete may not yield the targeted improvements in our business and may divert management’s attention
from our day-to-day operations. We also undertook a number of project initiatives to improve margins, focused on reducing
operating costs and expanding the products and value we can extract from a kernel of corn. The Ultra-High Protein and Clean
Sugar strategy includes substantial construction projects and significant capital expenditures to deploy FQT’s MSC™
technology, and FQT’s CST™ production capabilities to meet anticipated customers' demands and these technology
implementations may not perform as designed and are subject to various construction risks and delays in the supply chain.
These products may not be readily accepted as substitutes to existing sugars and proteins on the market, and we may not earn
a premium for them, even if they are of higher quality and have a lower CI.
We may not achieve our construction goals on time or within our budget. We may not achieve the operating yields we
project or our technologies may not perform as expected. We may not achieve product market sales, margins or pricing we
project, and our operating cost goals may not be achieved due to a variety of factors. Increasing costs for construction
materials, supply chain issues limiting the availability of certain components, lack of available labor and delays in required
permitting could all lead to projects being over budget and behind schedule. Our failure to achieve our production, sales and
pricing targets, including, but not limited to: construction, yield, sales, margin, pricing, or financial results associated with our
total transformation strategies could have an adverse effect on our business, financial condition or results of operations.
Domestic and foreign government biofuels programs could change and impact the ethanol market.
Domestic and foreign governments have adopted biofuels programs that drive demand for biofuels. In the United States,
the RFS mandates the minimum volume of renewable fuels that must be blended into the transportation fuel supply each year,
which affects the domestic market for ethanol. Similarly, Canada has adopted clean fuel regulations incenting the use of
biofuels, as have other countries.
In the U.S., through 2022, the EPA undertook rulemaking to set the RVO for the following year, though at times months
or years would pass without a finalized RVO. Further, the EPA has the authority to waive the requirements, in whole or in
part, if there is inadequate domestic renewable fuel supply or the requirement severely harms the economy or the
environment. After 2022, volumes are determined by the EPA in coordination with the Secretaries of Energy and Agriculture,
taking into account such factors as impact on environment, energy security, future rates of production, cost to consumers,
infrastructure, and other factors such as impact on commodity prices, job creation, rural economic development or food
prices. The EPA also has the authority to set volumes for multiple years at a time, rather than annually as required prior to
2022. In June 2023, the EPA finalized a multi-year RVO for 2023, 2024 and 2025.
Volumes can also be impacted as small refineries can petition the EPA for an SRE which, if approved, waives their
portion of the annual RVO requirements. The EPA, through consultation with the DOE and the USDA, can grant them a full
or partial waiver, or deny it outright within 90 days of submittal. Elimination of a refinery's obligation effectively lowers the
amount of renewable fuels required to be blended, and by extension the amount of RINs that need to be retired, which can
impact their values and ultimately blending levels of renewable fuels. There are multiple on-going legal challenges to how
the EPA has handled SREs and RFS rulemakings.
The D.C. Circuit Court of Appeals ruled that the EPA overstepped its authority in extending the one pound Reid Vapor
Pressure waiver for 10% ethanol blends to 15% ethanol blends in the summer, effectively limiting summertime sales of
ethanol blends above 10% to FFVs from June 1 to September 15 each year. Notwithstanding, on April 12, 2022, the President
announced that he had directed the EPA to issue an emergency waiver to allow for the continued sale of E15 during the June
1 to September 15 period. In 2023 and 2024, the EPA also issued emergency waivers to allow for continued sale of E15
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during the summer driving season. As of this filing, according to Prime the Pump, E15 is sold year-round at approximately
3,724 stations.
A string of 2024 U.S. Supreme Court decisions, namely Loper Bright Enterprises v. Raimondo, SEC v. Jarkesy and
Corner Post, Inc. v. Board of Governors of the Federal Reserve, have redefined the power of federal agencies, as well as
overturned the important principle of administrative law called "Chevron deference," based on a landmark case, Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc. The Chevron deference was a doctrine of judicial deference to
administrative interpretations. The change in Chevron precedent impacts how the EPA can administer the RFS, impose
limitations on the Treasury Department’s ability to promulgate regulations around IRA provisions, including SAF tax credits
and the 45Z Clean Fuel Production Credit, 45Q carbon capture and sequestration tax credits, EV tax credits and other clean
energy programs.
Similarly, should federal mandates regarding oxygenated gasoline be repealed, the market for domestic ethanol could be
adversely impacted. Economic incentives to blend based on the relative value of gasoline versus ethanol, taking into
consideration the octane value of ethanol, environmental requirements and the RFS mandate, may affect future demand. A
significant increase in supply of biofuels beyond the RFS mandated volumes could have an adverse impact on ethanol prices.
Moreover, changes to the RFS could negatively impact the price of ethanol or cause imported sugarcane or corn ethanol from
other countries to become more economical than domestic corn ethanol. Likewise, international, national, state and/or
regional LCFS programs like that of California, Oregon, Washington state or Canada could be favorable or harmful to U.S.
corn ethanol, depending on how the laws and regulations are crafted, enforced, interpreted, repealed and/or modified.
Future demand may be influenced by economic incentives to blend based on the relative value of gasoline versus
ethanol, taking into consideration the octane value of ethanol, environmental requirements and the value of RFS credits
known as RINs. Prior actions by the EPA to grant SREs without accounting for the lost gallons, for example, resulted in
lower RIN prices. The final RVO for 2023, 2024 and 2025 set biodiesel and renewable diesel volumes below existing
production levels, which contributed to lower D4, D5 and D6 RIN values in 2023 and 2024.
Our operations could be adversely impacted by domestic and/or foreign legislation, administration actions, court rulings,
EPA actions, or lawsuits that may reduce clean fuel mandates, such as the RFS, Canada's clean fuel regulations, California's
LCFS, or similar mandated volumes of conventional ethanol and other biofuels. To the extent domestic and/or foreign federal
or state laws or regulations are modified, repealed and/or enacted, it may result in the demand for ethanol being reduced,
which could negatively and materially affect our financial performance.
Future demand for ethanol is uncertain and changes in public perception, consumer acceptance and overall consumer
demand for transportation fuel could affect demand.
While many trade groups, academics and government agencies support ethanol as a fuel additive that promotes cleaner
air and reduces GHG emissions, others claim growing corn and producing ethanol consumes more energy, emits more GHG
emissions than other fuels and depletes water resources. While we do not agree, some studies suggest ethanol produced from
corn is less efficient than ethanol produced from switch grass or wheat grain. Others claim corn ethanol negatively impacts
consumers by causing the prices of food made from corn and corn byproducts, as well as meat derived from corn-consuming
livestock to increase. Ethanol critics also contend the industry redirects corn supplies from international food markets to
domestic fuel markets, and contributes to land use change domestically and abroad.
Today there are limited markets for ethanol beyond its value as an oxygenate domestically and abroad. We believe
further consumer acceptance of E15 and E85 fuels may be necessary before ethanol can achieve significant market share
growth in the U.S. Discretionary and E85 blending are important secondary markets. Discretionary blending is often
determined by the price of ethanol relative to gasoline, the value of RINs or other low-carbon fuel credits, and availability to
consumers. When discretionary blending is financially unattractive, the incremental demand for ethanol may be reduced.
New incentives for SAF could open new markets for ethanol through ATJ technologies that use low-CI ethanol as a feedstock
to produce SAF, which are emerging and being commercialized.
Demand for ethanol is also affected by overall demand for surface transportation fuel, which is affected by cost, number
of miles traveled and vehicle fuel economy. Miles traveled typically increases during the spring and summer months related
to vacation travel, followed closely by the fall season due to holiday travel. Global events, such as international health
epidemics, greatly decreased miles traveled and in turn, the demand for ethanol. Consumer demand for gasoline may be
impacted by various transportation trends, such as widespread adoption of electric vehicles. Numerous automakers have
announced plans to phase out the production of gasoline and diesel powered vehicles by the mid-2030s. These
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announcements coincide with pledges to ban the sale of internal combustion engines in countries such as Japan and the
United Kingdom by 2035, as well as a statewide ban in California, which several states are imitating. If realized, these bans
would accelerate the decline of liquid fuel demand for surface transportation and by extension demand for ethanol, biodiesel
and renewable diesel. The EPA has implemented CAFE standards, which could require aggressive EV deployment by
Original Equipment Manufacturers, though these regulations are subject to change. We continue to monitor legislation and
regulations that may impact the future sales of electric vehicles as well as vehicles with internal combustion engines in
various states and around the world.
Our business is directly affected by the supply and demand for ethanol and other fuels in the markets served by our
assets. Additionally, factors such as changes in the supply and demand of ethanol, could continue to negatively impact our
business. Reduced demand for ethanol may depress the value of our products, erode our margins, and reduce our ability to
generate revenue or operate profitably.
Our risk management and commodity trading strategies could be ineffective and expose us to decreased liquidity.
As market conditions warrant, we use forward contracts to sell some of our ethanol, distillers grains, Ultra-High Protein,
and renewable corn oil, or buy some of the corn, and natural gas we need to partially offset commodity price volatility. We
also engage in other hedging transactions and other commodity trading involving exchange-traded futures contracts for corn,
natural gas, ethanol, soybean meal, soybean oil and other agricultural commodities. The financial impact of these activities
depends on the price of the commodities involved and/or our ability to physically receive or deliver the commodities.
Hedging arrangements expose us to risk of financial loss when the counterparty defaults on its contract or, in the case of
exchange-traded contracts, when the expected differential between the price of the underlying and physical commodity
changes. Hedging activities can result in losses when a position is purchased in a declining market or sold in a rising market.
Hedging losses may be offset by a decreased cash price for corn, and natural gas and an increased cash price for ethanol,
distillers grains, Ultra-High Protein and renewable corn oil. We vary the amount of hedging and other risk mitigation
strategies we undertake and sometimes choose not to engage in hedging transactions at all. We cannot provide assurance that
our risk management and commodity trading strategies and decisions will be profitable or effectively offset commodity price
volatility. If they are not, our results of operations and financial position may be adversely affected.
The use of derivative financial instruments frequently involves cash deposits with brokers, or margin calls. Sudden
changes in commodity prices may require additional cash deposits immediately. Depending on our open derivative positions,
we may need additional liquidity with little advance notice to cover margin calls. While we continuously monitor our
exposure to margin calls, we cannot guarantee we will be able to maintain adequate liquidity to cover margin calls in the
future.
Carbon Capture and Sequestration projects we are committed to could be delayed or cease operations.
We have seven facilities committed to carbon capture and sequestration projects, including ongoing construction of
carbon capture equipment at three of our facilities. The projects we are committed to may be delayed or suspend operations
for various reasons prior to us realizing any benefit. The CI benefits we anticipate from our carbon reduction strategy may not
materialize. Additionally, the regulatory modeling for CI reductions may be adjusted outside of our control in such a manner
that reduces the anticipated benefits from these strategies. Federal guidelines in the IRA may be changed in the future to
preclude corn-based ethanol from recognizing tax incentives, or otherwise reduce our potential benefits. Delays in regulations
being issued, rescinding clean energy or carbon capture tax credits, could negatively impact our carbon capture endeavors.
Elimination of clean fuel tax credits and other incentives at the state, federal and international level could negatively impact
our business.
In the past, we have had operating losses and could incur future operating losses.
In the last five years, we incurred operating losses during certain quarters and annually and could incur operating losses
in the future that are substantial. Although we have had periods of sustained profitability, we may not be able to maintain or
increase profitability on a quarterly or annual basis, which could impact the market price of our common stock and the value
of your investment. In addition, periods of sustained losses create uncertainty as to whether some or all of our deferred tax
assets will be realizable in the future.
If the United States were to withdraw from or materially modify certain international trade agreements, our business,
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financial condition and results of operations could be materially adversely affected.
Ethanol and other products that we produce are or have been exported to Canada, Mexico, Brazil, China and other
countries. In a previous term, the Trump administration significantly increased tariffs on goods imported into the United
States, which in turn led to retaliatory actions on U.S. exports. The administration has expressed antipathy towards certain
existing international trade agreements, and has discussed plans to once again increase tariffs on imported goods. The
outcome of trade negotiations or lack thereof, has had and/or may continue to have a material adverse effect on our business,
financial condition and results of operations.
Our debt exposes us to numerous risks that could have significant consequences to our shareholders.
Risks related to the level of debt we have include: (1) requiring a sizeable portion of cash to be dedicated for debt
service, reducing the availability of cash flow for working capital, capital expenditures, and other general business activities
and limiting our ability to invest in new growth opportunities; (2) limiting our ability to obtain additional financing for
working capital, capital expenditures, acquisitions and other activities; (3) limiting our flexibility to plan for or react to
changes in the businesses and industries in which we operate; (4) increasing our vulnerability to general and industry-specific
adverse economic conditions; (5) being at a competitive disadvantage against less leveraged competitors; and (6) being
vulnerable to increases in prevailing interest rates. A portion of our debt bears interest at variable rates, which creates
exposure to interest rate risk. If interest rates increase, our debt service obligations at variable rates would increase even
though the amount borrowed remained the same, decreasing net income.
Our ability to make scheduled payments on or to refinance our debt obligations and to fund our planned capital
expenditures, acquisitions and other ongoing liquidity needs depends on our financial condition and operating performance,
which are subject to prevailing economic and competitive conditions as well as certain financial, business and other factors
which are beyond our control. There can be no assurance that we will maintain a level of cash flow from operating activities
in an amount sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flow
and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments
and capital expenditures, or to seek additional capital or restructure our indebtedness. These alternative measures may not be
successful and may not permit us to meet our scheduled debt service obligations. In the absence of such operating results and
resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to
meet our debt service and other obligations.
We are required to comply with a number of covenants under our existing loan agreements that could impact our liquidity.
We are required to maintain specified financial ratios, including minimum cash flow coverage, working capital and
leverage ratios under certain loan agreements. A breach of these covenants could result in default, and if such default is not
cured or waived, our lenders could accelerate our debt and declare it immediately due and payable. If this occurs, we may not
be able to repay or borrow sufficient funds to refinance the debt. Even if financing is available, it may not be on acceptable
terms. No assurance can be given that our future operating results will be sufficient to comply with these covenants or
remedy default.
In the event we are unable to comply with these covenants in the future, we cannot provide assurance that we will be able
to obtain the necessary waivers or amend our loan agreements to prevent default. Under our convertible senior notes, default
on any loan in excess of $20.0 million could result in the notes being declared due and payable, which could have a material
and adverse effect on our ability to operate.
We operate in a capital intensive business and rely on cash generated from operations and external financing, which could
be limited.
Increased commodity prices could increase liquidity requirements. Our operating cash flow is dependent on overall
commodity market conditions as well as our ability to operate profitably. In addition, we may need to raise additional
financing to fund growth. In some market environments, we may have limited access to incremental financing, which could
defer or cancel growth projects, reduce business activity or cause us to default on our existing debt agreements if we are
unable to meet our payment schedules. These events could have an adverse effect on our operations and financial position.
Our ability to repay current and anticipated future debt will depend on our financial and operating performance and
successful implementation of our business strategies. Our financial and operational performance will depend on numerous
factors including prevailing economic conditions, commodity prices, and financial, business and other factors beyond our
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control. If we cannot repay, refinance or extend our current debt at scheduled maturity dates, we could be forced to reduce or
delay capital expenditures, sell assets, restructure our debt or seek additional capital. If we are unable to restructure our debt
or raise funds, our operations and growth plans could be harmed and the value of our stock could be significantly reduced.
Disruptions in the credit market could limit our access to capital.
We may need additional capital to fund our growth or other business activities in the future. The cost of capital under our
existing or future financing arrangements could increase and affect our ability to trade with various commercial
counterparties or cause our counterparties to require additional forms of credit support. If capital markets are disrupted, we
may not be able to access capital at all or capital may only be available under less favorable terms.
Our production level may fluctuate due to planned and unplanned downtime at our assets.
Unplanned downtime may occur from time to time at our facilities. Our plants may not produce at yields we expect due
to a variety of reasons, including, but not limited to, equipment failures and other breakdowns; labor shortages; lack of
adequate raw materials, including corn supply; adverse pricing on raw materials and finished goods that becomes
uneconomical; poor rail service; lack of adequate storage for distillers grains, Ultra-High Protein, renewable corn oil or
ethanol; permitting or regulatory issues, adverse weather and other reasons. Any of these production events may adversely
impact our profitability and financial position.
Our ability to maintain the required regulatory permits or manage changes in environmental, safety and TTB regulations is
essential to successfully operating our plants.
Our plants are subject to extensive air, water, environmental and TTB regulations. Our production facilities involve the
emission of various airborne pollutants, including particulate, carbon dioxide, nitrogen oxides, hazardous air pollutants and
volatile organic compounds, which requires numerous environmental permits to operate our plants. Governing state agencies
could impose costly conditions or restrictions that are detrimental to our profitability and have a material adverse effect on
our operations, cash flows and financial position.
Environmental laws and regulations at the federal and state level are subject to change. These changes can also be made
retroactively. It is possible that more stringent federal or state environmental rules or regulations could be adopted, which
could increase our operating costs and expenses. Consequently, even though we currently have the proper permits, we may be
required to invest or spend considerable resources in order to comply with future environmental regulations. Furthermore,
ongoing plant operations, which are governed by the Occupational Safety and Health Administration, may change in a way
that increases the cost of plant operations. Any of these events could have a material adverse effect on our operations, cash
flows and financial position.
Part of our business is regulated by environmental laws and regulations governing the labeling, use, storage, discharge
and disposal of hazardous materials. Since we handle and use hazardous substances, changes in environmental requirements
or an unanticipated significant adverse environmental event could have a negative impact on our business. While we strive to
comply with all environmental requirements, we cannot provide assurance that we have been in compliance at all times or
will not incur material costs or liabilities in connection with these requirements. Private parties, including current and former
employees, could bring personal injury or other claims against us due to the presence of hazardous substances. We are also
exposed to residual risk by our land and facilities which may have environmental liabilities from prior use. Changes in
environmental regulations may require us to modify existing plant and processing facilities, which could significantly
increase our cost of operations.
TTB regulations apply when producing our undenatured ethanol. These regulations carry substantial penalties for non-
compliance and therefore any non-compliance may adversely affect our financial operations or adversely impact our ability to
produce undenatured ethanol.
Any inability to generate or obtain RINs could adversely affect our operating margins.
Under the RFS, biofuel producers generate different types of RINs to attach to each gallon produced depending on the
feedstock, pathway and level of GHG reduction. Cellulosic biofuel is assigned a D3 or D7 RIN, advanced biofuels such as
biodiesel and renewable diesel generate D4 RINs, advanced biofuels generate D5 RINs, and all other biofuels that do not
generate a D3, D4, D5 or D7 RIN qualify for a D6 RIN. Nearly all of our ethanol production is sold with D6 RINs that are
used by our customers to comply with their blending obligations under the RFS. Should our production practices not meet the
EPA’s requirements for RIN generation in the future, we would need to export the ethanol, purchase RINs in the open market
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or sell our ethanol at a discounted price to compensate for the absence of RINs. Likewise, our renewable corn oil must meet
regulatory requirements to be suitable as a feedstock for the production of renewable diesel, biodiesel and SAF, and changing
production practices or regulations could impact its suitability as a feedstock. The price of RINs depends on a variety of
factors, including the availability of qualifying biofuels and RINs for purchase, production levels of transportation fuel and
percentage mix of ethanol with other fuels, and cannot be predicted. The values of D6 RINs, for which most conventional
corn ethanol qualifies, have varied from a few pennies to well over a dollar. Failure to obtain sufficient RINs or reliance on
invalid RINs could subject us to fines and penalties imposed by the EPA which could adversely affect our results of
operations, cash flows and financial condition.
As we trade ethanol acquired from third-parties, should it be discovered the RINs associated with the ethanol we
purchased are invalid, albeit unknowingly, we could be subject to substantial penalties if we are assessed the maximum
amount allowed by law. Based on EPA penalties assessed on RINS violations in the past few years, in the event of a
violation, the EPA could assess penalties, which could have an adverse impact on our profitability.
Compliance with evolving environmental, health and safety laws and regulations, particularly those related to climate
change, could be costly.
Our plants emit biogenic carbon dioxide from fermentation as a by-product of ethanol production. While all ten of our
plants have grandfathered RFS pathways allowing them to operate under their current authorized capacity under their EPA
approved grandfathered limits, operating above these capacities requires an Efficient Producer Pathway, demonstrating at
least a 20% reduction in GHG emissions relative to petroleum-based gasoline from a 2005 baseline. Four of our plants
currently maintain Efficient Producer Pathways to operate at increased capacities. Separately, CARB began implementation
of the California LCFS in 2011, which aims to decrease the CI of transportation fuel in the state. In 2024, CARB voted to
amend the LCFS, which strengthened GHG benchmarks to 30% reductions vs 1990 levels by 2030, and 90% reductions vs
1990 levels by 2045. An indirect land usage charge component is included in the GHG emission calculation, which may have
an adverse impact on the market for corn-based ethanol in California. The amendments to the LCFS also increase compliance
requirements, including a more stringent verification for credits, potential credit forfeitures in the event of increases in
operational CI scores, and other changes which could impact our ability to participate in and profit from the program.
To expand our production capacity, federal and state regulations may require us to obtain additional permits, achieve
EPA’s efficient producer status under the pathway petition program, install advanced technology or reduce drying distillers
grains. Compliance with future laws or regulations to decrease carbon dioxide could be costly and may prevent us from
operating our plants as profitably, which may have an adverse impact on our operations, cash flows and financial position.
We may fail to realize the anticipated benefits of mergers, acquisitions, joint ventures or partnerships.
We have increased the size and diversity of our operations through mergers, acquisitions and joint ventures or
partnerships and intend to continue exploring potential growth opportunities. Acquisitions involve numerous risks that could
harm our business, including: (1) difficulties integrating the operations, technologies, products, existing contracts, accounting
processes and personnel and realizing anticipated synergies of the combined business; (2) risks relating to environmental
hazards on purchased sites; (3) risks relating to developing the necessary infrastructure for facilities or acquired sites,
including access to rail networks; (4) difficulties supporting and transitioning customers; (5) diversion of financial and
management resources from existing operations; (6) the purchase price exceeding the value realized; (7) risks of entering new
markets or areas outside of our core competencies; (8) potential loss of key employees, customers and strategic alliances from
our existing or acquired business; (9) unanticipated problems or underlying liabilities; and (10) inability to generate sufficient
revenue to offset acquisition and development costs. The anticipated benefits of these transactions may not be fully realized
or could take longer to realize than expected.
We have also pursued growth through joint ventures or partnerships, which typically involve restrictions on actions that
the partnership or joint venture may take without the approval of the partners. These provisions could limit our ability to
manage the partnership or joint venture in a manner that serves our best interests.
Future acquisitions may involve issuing equity as payment or to finance the business or assets, which could dilute your
ownership interest. Furthermore, additional debt may be necessary to complete these transactions, which could have a
material adverse effect on our financial condition. Failure to adequately address the risks associated with acquisitions or joint
ventures could have a material adverse effect on our business, results of operations and financial condition.
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Future events could result in impairment of long-lived assets, which may result in charges that adversely affect our results of
operations.
Long-lived assets, including property, plant and equipment, intangible assets, goodwill and equity method investments,
are evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Our impairment evaluations are subject to changes in key assumptions used in our analysis
and may require use of financial estimates of future cash flows. Application of alternative assumptions could produce
significantly different results. We may be required to recognize impairments of long-lived assets based on future economic
factors such as unfavorable changes in estimated future undiscounted cash flows of an asset group.
Global competition could affect our profitability.
We compete with producers in the United States and abroad. Depending on feedstock, labor and other production costs,
producers in other countries, such as Brazil, may be able to produce ethanol, corn oil and distillers grains cheaper or with a
lower CI than we can. Under the RFS, certain parties are obligated to meet an advanced biofuel standard. While
transportation costs, infrastructure constraints, currency valuations and demand may temper the impact of ethanol imports,
foreign competition remains a risk to our business. Moreover, significant additional foreign ethanol production could create
excess supply, which could result in lower ethanol prices throughout the world, including the United States. Penetration of
ethanol or distillers grains imports into the domestic or international market may have a material adverse effect on our
operations, cash flows and financial position.
International activities such as boycotts, embargoes, product rejection, trade policies and compliance matters, may have an
adverse effect on our results of operations.
Government actions abroad can have a significant impact on our business. We have experienced trade policy disputes,
tariffs, changing foreign laws as well as investigations in various foreign countries over the past ten years that have adversely
impacted the international demand for U.S. ethanol. With these types of international activities, the value of our products may
be affected, which could have a negative impact on our profitability. Additionally, tariffs on U.S. ethanol may lead to further
industry over-supply and reduce our profitability. Moreover, the America First trade position has caused more countries to
toughen their positions on U.S. imports.
The ability or willingness of OPEC and other oil exporting nations to set and maintain production levels has a significant
impact on oil and natural gas commodity prices.
The Organization of Petroleum Exporting Countries and their allies (collectively, OPEC+), is an intergovernmental
organization that seeks to manage the price and supply of oil on the global energy market. Actions taken by OPEC+
members, including those taken alongside other oil exporting nations, have a significant impact on global oil supply and
pricing. There can be no assurance that OPEC+ members and other oil exporting nations will agree to future production cuts
or other actions to support and stabilize oil prices, nor can there be any assurance that they will not further reduce oil prices or
increase production. Uncertainty regarding future actions to be taken by OPEC+ members or other oil exporting countries
could lead to increased volatility in the price of oil, which could adversely affect our business, future financial condition and
results of operations.
Increased ethanol industry penetration by oil and other multinational companies could impact our margins.
We operate in a very competitive environment and compete with other domestic ethanol producers in a relatively
fragmented industry. The top four producers account for approximately 39% of the domestic production capacity with
production capacity ranging from 903 mmgy to 3,015 mmgy. The remaining ethanol producers consist of smaller entities
engaged exclusively in ethanol production and large integrated grain companies that produce ethanol in addition to their base
grain businesses. We compete for capital, labor, corn, shipping and other resources with these companies. Historically, oil
companies, petrochemical refiners and gasoline retailers were not engaged in ethanol, biodiesel and other biofuel production
even though they form the primary distribution network for finished liquid fuels. As of this filing, oil refiners accounted for
approximately 10% of domestic ethanol production. If these companies increase their ethanol plant ownership or additional
companies commence production, the need to purchase ethanol from independent producers like us or at pricing that provides
us an acceptable margin could diminish and adversely effect on our operations, cash flows and financial position. Integrated
oil companies and merchant refiners are increasingly investing in retrofitting refineries or building new refineries to produce
renewable diesel, and partnering with commodity processors to supply soybean oil, distillers corn oil and other feedstocks,
which could adversely impact the market for our renewable corn oil and Ultra-High Protein.
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Our agribusiness operations are subject to significant government regulations.
Our agribusiness operations are regulated by various government entities that can impose significant costs on our
business. Failure to comply could result in additional expenditures, fines or criminal action. Our production levels, markets
and grains we merchandise are affected by federal government programs. Government policies such as tariffs, duties,
subsidies, import and export restrictions, tax incentives, commodity support programs, conservation incentives, fuel and
vehicle standards and embargos can also impact our business. Changes in government policies and producer support could
impact the type and amount of grains planted, which could affect our ability to buy grain. Export restrictions or tariffs could
limit sales opportunities outside of the United States.
Commodities futures trading is subject to extensive regulations.
The futures industry is subject to extensive regulation. In addition to trading physical commodities, the company may
engage in trading of futures, forward and options contracts, and other derivative instruments. As a market participant, we are
subject to regulation concerning trade practices, business conduct, reporting, position limits, record retention, the conduct of
our officers and employees, and other matters. Since we use exchange-traded futures contracts as part of our business, we are
subject to the Commodity Exchange Act and are required to comply with a wide range of requirements imposed by the
Commodity Futures Trading Commission (CFTC), Federal Energy Regulatory Commission (FERC), National Futures
Association and the exchanges on which we trade.
Among other requirements, the CFTC and certain exchanges have established limits on the maximum net long and net
short positions that may be held or controlled in particular commodities. The company currently maintains a hedge exemption
through the CME Group for corn traded on the CBOT exchange, increasing the allowable long and short futures positions
that may be held during the spot and single/all month periods. Due to rules imposed by the FERC under the Natural Gas Act,
the company has enacted limitations on the size of financial positions that may be held when a physical position is held
contemporaneously within a given market location.
Failure to comply with the laws, rules or regulations applicable to futures trading could have adverse consequences. Such
claims could result in fines, settlements or suspended trading privileges, which could have a material adverse impact on our
business, financial condition or operating results.
Our success depends on our ability to manage our changing operations.
Since our formation in 2004, our business has changed significantly in size, products and complexity. These changes
place substantial demands on our management, systems, internal controls, and financial and physical resources. If we acquire
or develop additional operations, implement new technologies, sell into new markets, track the CI of the feedstocks we
purchase and finished products we sell, we may need to further develop our financial and managerial controls and reporting
systems, and could incur expenses related to hiring additional qualified personnel and expanding our information technology
infrastructure. Our ability to manage change and/or growth effectively could impact our results of operations, financial
position and cash flows.
New ethanol process technologies could emerge that require less energy per gallon to produce or increase yields of
various products and in some cases develop new co-products and result in lower production costs or more favorable
economics for a plant. Our process technologies could become less effective or competitive than competing technologies or
become obsolete and place us at a competitive disadvantage, which could have a material adverse effect on our operations,
cash flows and financial position. Newly constructed plants could operate more efficiently and reliably than the legacy fleet
of plants constructed approximately 20 years ago, which includes our assets, putting us at a competitive disadvantage.
Competitors could successfully deploy carbon capture technology and achieve lower CI scores before we are able to do so,
which could put us at a competitive disadvantage, and adversely affect our operations, financial position and cash flows.
We may be required to provide remedies for ethanol, distillers grains, Ultra-High Protein or renewable corn oil that do not
meet the specifications defined in our sales contracts.
If we produce or purchase ethanol, distillers grains, Ultra-High Protein or renewable corn oil that does not meet the
specifications defined in our sales contracts, we may be subject to quality claims. We could be required to refund the
purchase price of any non-conforming product or replace the non-conforming product at our expense. Ethanol, distillers
grains, Ultra-High Protein or renewable corn oil that we purchase or market and subsequently sell to others could result in
similar claims if the product does not meet applicable contract specifications, which could have an adverse impact on our
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profitability.
Business disruptions due to unforeseen operational failures or factors outside of our control could impact our ability to fulfill
contractual obligations.
Natural disasters, pandemics, transportation issues, significant track damage resulting from a train derailment, aging
equipment breakdowns, coupled with supply chain challenges impacting repairs or replacements, or labor strikes by our
transportation providers could adversely impact operations and/or delay shipments of raw materials to our plants or deliveries
of ethanol, distillers grains, Ultra-High Protein and renewable corn oil to our customers. If we are unable to meet customer
demand or contract delivery requirements due to stalled operations caused by business disruptions, we could potentially lose
customers or volume with such customers.
Shifts in global markets, supply or demand changes, as well as adverse weather conditions, such as inadequate or
excessive amounts of rain during the growing season, overly wet conditions, hail, derecho wind events, an early freeze or
snowy weather during harvest could impact the supply of corn that is needed to produce ethanol. Corn stored in a temporary
open pile may be damaged by rain or warm weather before the corn is dried, shipped or moved into a permanent storage
structure. Any such change or conditions could adversely affect our profitability.
Our ethanol-related assets may be at greater risk of terrorist attacks, threats of war or actual war, than other possible
targets.
Terrorist attacks in the United States, including threats of war or actual war, may adversely affect our operations. A
direct attack on our ethanol plants, storage facilities, fuel terminals and railcars could have a material adverse effect on our
financial condition, results of operations and cash flows. Furthermore, a terrorist attack could have an adverse impact on
ethanol prices. Disruption or significant increases in ethanol prices could result in government-imposed price controls.
Our network infrastructure, enterprise applications and internal technology systems could be damaged or otherwise fail and
disrupt business activities.
Our network infrastructure, enterprise applications and internal technology systems are instrumental to the day-to-day
operations of our business. Numerous factors outside of our control, including earthquakes, floods, lightning, tornados, fire,
power loss, telecommunication failures, computer viruses, physical or electronic vandalism or similar disruptions could result
in system failures, interruptions or loss of critical data and prevent us from fulfilling customer orders. We cannot provide
assurance that our backup systems are sufficient to mitigate hardware or software failures, which could result in business
disruptions that negatively impact our operating results and damage our reputation.
We could be adversely affected by cyber-attacks, data security breaches and significant information technology systems
interruptions.
We rely on network infrastructure, enterprise applications, and internal and external technology systems for operational,
marketing support and sales, and product development activities. The hardware and software systems related to such
activities are subject to damage from earthquakes, floods, lightning, tornados, fire, power loss, telecommunication failures,
cyber-attacks and other similar events. They are also subject to acts such as computer viruses, physical or electronic
vandalism or other similar disruptions that could cause system interruptions and loss of critical data, and could prevent us
from fulfilling customers’ orders. We have experienced various cyber-attacks, with minimal consequences on our business to
date. As examples, we have experienced attempts to gain access to systems, denial of service attacks, attempted malware
infections, account takeovers, scanning activity and phishing emails. Attacks can originate from external criminals, terrorists,
nation states or internal actors.
We will continue to dedicate resources and incur expenses to maintain and update on an ongoing basis the systems and
processes that are designed to mitigate the information security risks we face and protect the security of our computer
systems, software, networks and other technology assets against attempts by unauthorized parties to obtain access to
confidential information, disrupt or degrade service or cause other damage. We have implemented numerous cybersecurity
measures, including but not limited to, ongoing collaboration and engagement with the Department of Homeland Security,
access controls, data encryption, internal and third-party vulnerability assessments, employee training, continuous protection
and monitoring, and maintenance of backup and protective systems. Our information technology systems may still be
vulnerable to cybersecurity threats and other electronic security breaches. While we have taken reasonable efforts to protect
ourselves, we cannot assure our shareholders that our security measures would be sufficient in the future. Any event that
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causes failures or interruption in such hardware or software systems could result in disruption of our business operations,
have a negative impact on our operating results, and damage our reputation, which could negatively affect our financial
condition, and results of operation.
We may not be able to hire and retain qualified personnel to operate our facilities.
Our success relies on our ability to attract and retain skilled and capable employees. Each of our locations, as well as our
corporate office, requires qualified professionals across key roles, including but not limited to engineering, merchandising,
finance, accounting, management, and other critical functions. If we are unable to hire and retain top talent, we may not be
able to maximize production, optimize plant operations and effectively execute our business strategy.
Compliance with and changes in tax laws could adversely affect our performance.
We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes, indirect taxes
(excise/duty, sales/use, gross receipts, and value-added taxes), payroll taxes, franchise taxes, withholding taxes, and ad
valorem taxes. New tax laws and regulations and changes in existing tax laws and regulations are continuously being enacted
or proposed that could result in increased expenditures for tax liabilities in the future. Many of these liabilities are subject to
periodic audits by the respective taxing authority. Subsequent changes to our tax liabilities as a result of these audits may
subject us to interest and penalties. Tax incentives for producing low-carbon fuels may add additional complexity to our
business, and our ability to qualify for them relative to other producers may put us at a competitive disadvantage.
Federal, state and local jurisdictions may challenge our tax return positions.
The positions taken in our federal and state tax return filings require significant judgments, use of estimates and the
interpretation and application of complex tax laws. Significant judgment is also required in assessing the timing and amounts
of deductible and taxable items. Despite management’s belief that our tax return positions are fully supportable, certain
positions may be successfully challenged by federal, state and local jurisdictions, adversely affecting our financial position.
Financial performance of our equity method investments are subject to risks beyond our control and can vary substantially
from period to period.
The company invests in certain limited liability companies, which are accounted for using the equity method of
accounting. This means that the company’s share of net income or loss in the investee increases or decreases, as applicable,
the carrying value of the investment. By operating a business through this arrangement, we do not have control over
operating decisions as we would if we owned the business outright. Specifically, we cannot act on major business initiatives
without the consent of the other investors.
The company recognizes these investments within other assets on the consolidated balance sheets and its proportionate
share of earnings on a separate line item in the consolidated statements of operations. As a result, the amount of net
investment income recognized from these investments can vary substantially from period to period. Any losses experienced
by these entities could adversely impact our results of operations and the value of our investment.
We are exposed to credit risk that could result in losses or affect our ability to make payments should a counterparty fail to
perform according to the terms of our agreement.
We are exposed to credit risk from a variety of customers, including major integrated oil companies, large independent
refiners, petroleum wholesalers and other ethanol plants. We are also exposed to credit risk with major suppliers of petroleum
products and agricultural inputs when we make payments for undelivered inventories. Our fixed-price forward contracts are
subject to credit risk when prices change significantly prior to delivery. The inability by a third party to pay us for our sales,
provide product that was paid for in advance or deliver on a fixed-price contract could result in a loss and adversely impact
our liquidity and ability to make our own payments when due.
We have limitations, as a holding company, in our ability to receive distributions from a small number of our subsidiaries.
We conduct most of our operations through our subsidiaries and rely on dividends or intercompany transfers of funds to
generate free cash flow. Some of our subsidiaries are currently, or are expected to be, limited in their ability to pay dividends
or make distributions under the terms of their financing agreements. Consequently, we cannot fully rely on the cash flow
from one subsidiary to satisfy the loan obligations of another subsidiary. As a result, if a subsidiary is unable to satisfy its
24
loan obligations, we may not be able to prevent default by providing additional cash to that subsidiary, even if sufficient cash
exists elsewhere within our organization.
The ability of suppliers to deliver inputs, parts, components and equipment to our facilities, and our ability to construct our
facilities without disruption, could affect our business performance.
We use a wide range of materials and components in the production of our products and our transformation construction,
which come from numerous suppliers. Also, key parts may be available only from a single or a limited group of suppliers,
and we are subject to supply and pricing risk. Our operations and those of our suppliers are subject to disruption for a variety
of reasons, including supplier plant shutdowns or slowdowns, parts availability, transportation delays, work stoppages, labor
relations, governmental regulatory and enforcement actions, disputes with suppliers, distributors or transportation providers,
information technology failures, and natural hazards, including due to climate change. We may be impacted by supply chain
issues, due to factors largely beyond our control, which could escalate in future quarters. Any of the foregoing factors may
result in higher costs, operational disruptions or construction delays, which could have an adverse impact on our business and
financial statements. Such disruption has in the past and could in the future interrupt our ability to manufacture certain
products. Any significant disruption could have a material adverse impact on our financial statements.
Inflation may impact the cost and/or availability of materials, inputs and labor, which could adversely affect our operating
results.
We have experienced inflationary impacts on raw materials, labor costs, wages, components, equipment, other inputs and
services across our business and inflation and its impact could escalate in future quarters, many of which are beyond our
control. Moreover, we may not be able to pass those costs along in the products we sell. As such, inflationary pressures could
have a material adverse effect on our performance and financial statements.
Climate change, environmental, social and corporate governance issues and uncertainty regarding regulation of such
matters may increase our operating costs, impact our capital markets and potentially reduce the value of our products and
assets.
The issue of global climate change continues to attract considerable public and scientific attention with widespread
concern about the impacts of human activity, especially the emissions of GHG such as carbon dioxide and methane. Climate
change legislation in the U.S. is likely to receive increased focus and consideration over the next several decades, with
numerous proposals having been made and are likely to continue to be made at the international, national, regional and state
levels of government that are intended to limit emissions of GHG and capture carbon. Several states have already adopted
measures requiring reduction of GHG within state boundaries. Other states have elected to participate in voluntary regional
cap-and-trade programs, low-carbon fuel standards and low-carbon energy requirements. While we have considered potential
risks with transitioning to a low-carbon economy, and we believe our products are low carbon and result in a reduction of
GHG emissions compared to alternatives, any significant legislative changes at the international, national, state or local levels
could significantly affect our ability to produce and sell our products, could increase the cost of the production and sale of our
products and could materially reduce the value of our products. Additionally, our industry receives adverse commentary
related to food versus fuel and land use change/conversion debates. These debates could increase which could potentially
result in increased costs and/or regulations. Moreover, costs to transition to lower emissions process technology related to our
decarbonization strategy is a related risk that has the potential to result in increased research and development expenditures in
new and alternative technologies and capital investments in technology development. Unsuccessful investment in new
technologies could pose further risk. Transitioning to a low-carbon economy could also result in increased cost of raw
materials, which could increase our overall production costs.
Apart from legislation and regulation, some banks based both domestically and internationally have announced that they
have adopted non-financial metrics for evaluating companies on their environmental impact, governance structure, and other
criteria. There have also been efforts in recent years affecting the investment community promoting the divestment of fossil
fuel equities, and encouraging the consideration of environmental factors in evaluating companies. While we have made
improvements to our corporate governance, and continue to reduce the environmental impact of our operations and
ingredients, these trends may adversely affect the demand for and price of securities issued by us, and impact our access to
the capital and financial markets.
Further, it is believed that climate change itself may cause more extreme temperatures and weather conditions such as
more intense hurricanes, thunderstorms, tornadoes, droughts, floods, snow or ice storms as well as rising sea levels and
increased volatility in temperatures. Extreme weather conditions can interfere with our operations and cause damage resulting
25
from extreme weather, which may not be fully insured. However, at this time, we are unable to determine the extent to which
any potential climate change may lead to increased weather hazards affecting our operations.
Our insurance policies do not cover all losses, costs or liabilities that we may experience, and insurance companies that
currently insure companies in the energy industry may cease to do so or substantially increase premiums.
We are insured under property, liability and business interruption policies, subject to the deductibles and limits under
those policies. We have acquired insurance that we believe to be adequate to prevent loss from material foreseeable risks.
However, events may occur for which no insurance is available for some or all of the loss or for which insurance is not
available on terms that are acceptable. Loss from an event, such as, but not limited to war, riots, pandemics, terrorism or other
risks, may not be insured and such a loss may have a material adverse effect on our operations, cash flows and financial
position. Certain of our ethanol plants and our related storage tanks, as well as certain of our fuel terminal facilities are
located within recognized seismic and flood zones. We believe that the design of these facilities have been modified to fortify
them to meet structural requirements for those regions of the country. We have also obtained additional insurance coverage
specific to earthquake and flood risks for the applicable plants and fuel terminals. However, there is no assurance that any
such facility would remain in operation if a seismic or flood event were to occur.
Additionally, our ability to obtain and maintain adequate insurance may be adversely affected by conditions in the
insurance market over which we have no control. In addition, if we experience insurable events, our annual premiums could
increase further or insurance may not be available at all. If significant changes in the number or financial solvency of
insurance underwriters for the ethanol industry occur, we may be unable to obtain and maintain adequate insurance at a
reasonable cost. We cannot assure our shareholders that we will be able to renew our insurance coverage on acceptable terms,
if at all, or that we will be able to arrange for adequate alternative coverage in the event of non-renewal. The occurrence of an
event that is not fully covered by insurance, the failure by one or more insurers to honor its commitments for an insured event
or the loss of insurance coverage could have a material adverse effect on our financial condition, results of operations, cash
flows.
Our review of strategic alternatives may be disruptive to our business.
On February 7, 2024, we publicly announced that our Board of Directors has authorized a process to explore a range of
strategic alternatives, which could include, among other things, acquisitions, divestitures, a merger or sale, partnerships and
financings. Exploring strategic alternatives may create a significant distraction for our management team and Board of
Directors and require us to expend significant time and resources and incur expenses for advisors. Moreover, the review of
strategic alternatives may disrupt our business by causing uncertainty among current and potential employees, suppliers,
customers and investors. The selection and execution of a strategic alternative may lead to similar disruptions, and parties
advocating for alternatives not selected may solicit support for such other alternatives, causing further disruption.
Risks Related to our Common Stock
The price of our common stock may be highly volatile and subject to factors beyond our control.
Some of the many factors that can influence the price of our common stock include: (1) our results of operations and the
performance of our competitors; (2) public’s reaction to our press releases, public announcements and filings with the SEC;
(3) changes in earnings estimates or recommendations by equity research analysts who follow us or other companies in our
industry; (4) changes in general economic conditions; (5) changes in market prices for our products or raw materials and
related substitutes; (6) sales or purchases of common stock by our directors, executive officers and significant shareholders;
(7) actions by institutional investors trading in our stock; (8) disruptions in our operations; (9) changes in our management
team; (10) other developments affecting us, our industry or our competitors; and (11) U.S. and international economic, legal
and regulatory factors unrelated to our performance. The stock market may experience significant price and volume
fluctuations, which are unrelated to the operating performance of any particular company. These broad market fluctuations
could materially reduce the price of our common stock price based on factors that have little or nothing to do with our
company or its performance.
Anti-takeover provisions could make it difficult for a third party to acquire us.
Our restated articles of incorporation, restated bylaws and Iowa’s law contain anti-takeover provisions that could delay
or prevent change in control of us or our management. These provisions discourage proxy contests, making it difficult for our
shareholders to take other corporate actions without the consent of our board of directors, which include: (1) board members
26
can only be removed for cause with an affirmative vote of no less than two-thirds of the outstanding shares; (2) shareholder
action can only be taken at a special or annual meeting, not by written consent except where required by Iowa law; (3)
shareholders are restricted from making proposals at shareholder meetings; and (4) the board of directors can issue authorized
or unissued shares of stock. We are subject to the provisions of the Iowa Business Corporations Act, which prohibits
combinations between an Iowa corporation whose stock is publicly traded or held by more than 2,000 shareholders and an
interested shareholder for three years unless certain exemption requirements are met.
Provisions in the convertible notes could also make it more difficult or too expensive for a third party to acquire us. If a
takeover constitutes a fundamental change, holders of the notes have the right to require us to repurchase their notes in cash.
If a takeover constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders
who convert their notes. In either case, the obligation under the notes could increase the acquisition cost and discourage a
third party from acquiring us. These items discourage transactions that could otherwise command a premium over prevailing
market prices and may limit the price investors are willing to pay for our stock.
Non-U.S. shareholders may be subject to U.S. income tax on gains related to the sale of their common stock.
If we are a U.S. real property holding corporation during the shorter of the five-year period before the stock was sold or
the period the stock was held by a non-U.S. shareholder, the non-U.S. shareholder could be subject to U.S federal income tax
on gains related to the sale of their common stock. Whether we are a U.S. real property holding corporation depends on the
fair market value of our U.S. real property interests relative to our other trade or business assets and non-U.S. real property
interests. We cannot provide assurance that we are not a U.S. real property holding corporation or will not become one in the
future.
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
Risk Management and Strategy
We promote a company-wide culture of cybersecurity risk management to ensure that cybersecurity risk considerations
are an integral part of decision-making at all organizational levels. To protect the confidentiality, integrity and availability of
our data and information systems, we have implemented cyber defenses and continuously enhance them to address evolving
threats. Our information technology (IT) department actively monitors and evaluates our cybersecurity practices to ensure
alignment with our business objectives and operational needs. Our cybersecurity program is comprehensive in scope and
covers the systems supporting all our business operations.
Our program is built on industry-standard frameworks, including the National Institute of Standards and Technology, and
the Cybersecurity and Infrastructure Security Agency. We also follow applicable federal and state statutory and regulatory
guidance and have adopted internal policies and standards in alignment with these federal and state requirements.
Furthermore, we collaborate with external experts, consultants and auditors in routinely evaluating and testing our
information systems controls. We also perform an annual pen-testing, cyber table-top exercise to help us test and refine our
formal Cyber Incident Response Plan.
We maintain a well-documented process to oversee cybersecurity risks associated with our third-party service providers.
We evaluate our third parties prior to any engagements and review their System and Organization Controls reports to obtain
reasonable assurance that their controls meet our security standards.
Our IT policies communicate our expectations for employees and contractors regarding the security of our IT systems.
We perform annual cyber security and technology processes training programs and regular third-party phishing campaigns to
raise awareness of potential threats.
Governance
The Audit Committee of the Board of Directors has oversight of management's efforts with respect to IT systems and
cybersecurity. As part of this oversight, the company's IT leader meets on a quarterly basis with the Audit Committee and on
an annual basis with the company's Board of Directors. During these update meetings, IT provides the Audit Committee and
27
Board of Directors updates regarding any changes around our cyber defenses, ongoing IT initiatives, and emerging threats
and plans to pro-actively counter these threats.
Management continuously monitors the effectiveness of our cybersecurity defenses. We invest in regular and ongoing
cybersecurity training for our IT department and company overall. Our Senior Vice President Business Technology has IT
industry certifications and brings over 30 years of IT background spanning all facets of technology, including applications,
infrastructure and cybersecurity. Our Director of IT Security has over 20 years of experience in cybersecurity, including
duties as an Information Security Officer in the United States Air Force.
As of December 31, 2024, we have not identified an indication of a cybersecurity incident that would have a material
impact on our business and consolidated financial statements.
Item 2. Properties.
We believe the properties owned and leased at our locations are sufficient to accommodate our current needs, as well as
potential expansion.
Corporate
We lease approximately 54,000 square feet of office space in Omaha, Nebraska for our corporate headquarters, which
houses our corporate administrative functions and commodity trading operations.
Ethanol Production Segment
We own approximately 1,599 acres of land and lease approximately 79 acres of land at and around our ethanol
production facilities. Additionally, we own approximately five acres of land and lease approximately five acres of land at our
fuel terminal facility. As detailed in our discussion of the ethanol production segment in Item 1 – Business, our ethanol plants
have the capacity to produce approximately 903 million gallons of ethanol per year.
Agribusiness and Energy Services Segment
As detailed in our discussion in Item 1 – Business, our agribusiness and energy services segment facilities include grain
storage capacity at our ethanol plants of approximately 20.2 million bushels.
We lease approximately 50,500 square feet of manufacturing space in Omaha, Nebraska for our Optimal Aquafeed LLC
operations, where we manufacture and store fish food, feed ingredients and other related products.
Our marketing operations are conducted primarily at our corporate office, in Omaha, Nebraska.
Item 3. Legal Proceedings.
We are currently involved in litigation that has occurred in the ordinary course of doing business. We do not believe this
will have a material adverse effect on our financial position, results of operations or cash flows.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.
Common Stock
Our common stock trades under the symbol “GPRE” on Nasdaq.
Holders of Record
We had 1,706 holders of record of our common stock, not including beneficial holders whose shares are held in names
other than their own, on February 4, 2025. This figure does not include approximately 62.4 million shares held in depository
trusts.
Dividend Policy
In order to retain and direct cash flow to the company’s operating strategy, the deployment of high-protein technology,
the deployment of Clean Sugar Technology™ and other corporate purposes, the company did not pay a cash dividend on its
shares of common stock for the years ended December 31, 2024 and 2023, respectively. The company does not anticipate
declaring cash dividends on its common stock for the foreseeable future.
Issuer Purchases of Equity Securities
Employees and directors may surrender shares when restricted stock grants are vested to satisfy statutory minimum
required payroll tax withholding obligations. The following table lists the shares that were surrendered during the fourth
quarter of 2024:
Period
Total Number of
Shares Withheld
Average Price
Paid per Share
October 1 - October 31
1,429 $
12.85
November 1 - November 30
7,856
10.95
December 1 - December 31
847
10.58
Total
10,132 $
11.19
Our board of directors authorized a share repurchase program of up to $200.0 million of our common stock. Under this
program, we may repurchase shares in open market transactions, privately negotiated transactions, accelerated buyback
programs, tender offers or by other means. The timing and amount of the transactions are determined by management based
on its evaluation of market conditions, share price, legal requirements and other factors. The program may be suspended,
modified or discontinued at any time, without prior notice. We did not repurchase any shares during 2024. Since inception,
the company has repurchased 7.4 million shares of common stock for approximately $92.8 million under the program.
Recent Sales of Unregistered Securities
None.
Equity Compensation Plans
Refer to Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
for information regarding shares authorized for issuance under equity compensation plans.
29
Performance Graph
The following graph compares our cumulative total return with the S&P SmallCap 600 Index and the Nasdaq Clean
Edge Green Energy Index (CELS) for each of the five years ended December 31, 2024. The graph assumes a $100
investment in our common stock and each index at December 31, 2019, and that all dividends were reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Green Plains, Inc., the S&P Smallcap 600 Index
and the NASDAQ Clean Edge Green Energy Index
Green Plains, Inc.
S&P Smallcap 600
NASDAQ Clean Edge Green Energy
12/19
12/20
12/21
12/22
12/23
12/24
0
50
100
150
200
250
300
350
400
450
*$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
12/19
12/20
12/21
12/22
12/23
12/24
Green Plains Inc.
$
100.00 $
85.35 $
225.28 $
197.67 $
163.45 $
61.44
S&P SmallCap 600
100.00
111.29
141.13
118.41
137.42
149.37
Nasdaq Clean Edge Green Energy
100.00
284.83
277.30
193.70
174.51
141.58
The information in the graph will not be considered solicitation material, nor will it be filed with the SEC or incorporated
by reference into any future filing under the Securities Act or the Exchange Act, unless we specifically incorporate it by
reference into our filing.
Item 6. Reserved.
30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
General
The following discussion and analysis includes information management believes is relevant to understand and assess
our consolidated financial condition and results of operations. This section should be read in conjunction with our
consolidated financial statements, accompanying notes and the risk factors contained in this report.
Overview
Green Plains is an Iowa corporation, founded in June 2004 as a producer of low-carbon fuels and has grown to be a
leading biorefining company maximizing the potential of existing resources through fermentation and patented agribusiness
technologies. We continue the transition from a commodity-processing business to a value-added agricultural technology
company creating lower carbon, high-value ingredients from existing resources. To that end, we are currently executing on a
number of initiatives to develop and implement proven agricultural, food and industrial biotechnology systems that allow for
product diversification, new market opportunities and production of additional value-added low-carbon ingredients, such as
Ultra-High Protein, glucose and dextrose corn syrups, renewable corn oil and more, as well as offering these technologies to
the broader biofuels industry.
Green Plains Partners LP, a master limited partnership, was our primary downstream storage and logistics provider since
its assets are the principal method of storing and delivering the ethanol we produce. On January 9, 2024, pursuant to the
Merger Agreement, we completed the acquisition of all the publicly held common units of the partnership not already owned
by us and our affiliates. As a result of the Merger, the partnership common units are no longer publicly traded. During the
fourth quarter of 2024, the partnership was dissolved. Refer to Note 4 – Merger and Dispositions included in the notes to the
audited consolidated financial statements included herein for more information.
We have installed and are operating FQT MSC™ technology at five of our biorefineries. Through our value-added
ingredients initiative, we produce Ultra-High Protein, a feed ingredient with protein concentrations of 50% or greater and
yeast concentrations of 25%, increase production of renewable corn oil and produce other higher value products, such as
post-MSC™ distillers grains. We successfully completed full scale 60% protein production runs using FQT's MSC™ system,
which is our new specialty feed ingredient branded as Sequence™. Our 50/50 joint venture with Tharaldson Ethanol Plant I
LLC (Tharaldson Ethanol) owns the MSC™ technology assets added adjacent to the Tharaldson Ethanol plant in Casselton,
North Dakota which produces Ultra-High Protein and increases renewable corn oil yields. These assets completed
commissioning and shipped the first commercial quantities during the second quarter of 2024. Including GP Turnkey
Tharaldson's capacity, the annual Ultra-High Protein capacity we market is approximately 430 thousand tons.
The world's first commercial scale FQT CST™ facility in Shenandoah, Iowa has achieved successful ongoing production
of dextrose syrups with CST™. The FQT CST™ technology allows for the production of both food and industrial grade low
carbon-intensity glucose and dextrose corn syrups to target applications in food production, renewable chemicals and
synthetic biology. The facility is currently capable of producing 60 million pounds of product per year, and we also anticipate
modifying additional biorefineries to include FQT CST™ production capabilities to meet anticipated future customer
demand.
Additionally, we have taken advantage of opportunities to divest certain assets to reallocate capital toward our current
growth initiatives. We are focused on generating stable and growing operating margins through our business segments and
risk management strategy.
As part of our carbon reduction strategy, we committed our seven biorefineries in Nebraska, Iowa and Minnesota to
carbon capture and sequestration projects through carbon pipeline transport, four with Summit Carbon Solutions and three
with Trailblazer CO2 Pipeline LLC, which will lower GHG emissions through the capture of biogenic carbon dioxide at each
of these biorefineries, significantly lowering their CI. We have executed agreements for the future purchase, financing and
installation of carbon capture equipment at our three Nebraska plants. The rights of way for the laterals to connect our
Nebraska biorefineries have been secured, and all necessary Class VI sequestration well permits have been issued. We
anticipate completion of these Nebraska biorefinery carbon capture projects in the second half of 2025. Summit Carbon
Solutions intends to be operational in 2027. In addition, we are collaborating with global partners to explore innovative
options for carbon use where pipeline transport or direct injection may not be feasible. Reducing the CI of our fuel ethanol
could allow us to benefit from state and federal clean fuel programs, including LCFS and federal tax credits under the IRA,
and could position our low-carbon ethanol as a potential feedstock for ATJ pathways to produce SAF.
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SAF is a drop-in fuel, chemically identical to petroleum-based jet fuel and can be blended into the fuel supply at varying
levels. There is an increasing focus on using this fuel to reduce the carbon footprint of air travel. SAF can be produced from
vegetable and waste oil feedstocks, such as our renewable corn oil. Additionally, ATJ technologies are emerging and being
commercialized that use low-CI ethanol as a feedstock to produce SAF. In January 2023, Green Plains, United Airlines and
Tallgrass formed a joint venture, Blue Blade Energy, to develop and then commercialize a novel ATJ SAF technology.
In July 2023, we announced a technology collaboration with Equilon Enterprises LLC, which allows us to use FQT’s
precision separation and processing technology with Shell Fiber Conversion Technology. The two technologies will combine
fermentation, mechanical separation and processing, and fiber conversion into one platform. This has the potential to create a
new process to liberate all available distillers corn oil currently bound in the fiber fraction of the corn kernel, generate
cellulosic sugars for production of low-carbon ethanol, and enhance and expand available high protein to produce high-
quality ingredients for global animal feed diets. Our collaboration completed the construction of a facility at Green Plains
York and began commissioning during 2024.
Our profitability is highly dependent on commodity prices, particularly for ethanol, distillers grains, Ultra-High Protein,
renewable corn oil, soybean meal, corn, and natural gas. Since market price fluctuations of these commodities are not always
correlated, our operations may be unprofitable at times. We use a variety of risk management tools and hedging strategies to
monitor price risk exposure at our ethanol plants and lock in favorable margins or reduce production when margins are
compressed. Our profitability could be significantly impacted by price movements of the aforementioned commodities.
More information about our business, properties and strategy can be found under Item 1 – Business and a description of
our risk factors can be found under Item 1A – Risk Factors.
Strategic Review
As previously announced, the company initiated a strategic review process in February 2024 to explore a broad range of
opportunities to enhance long-term shareholder value, including, but not limited to, acquisitions, divestitures, a merger or
sale, partnerships and financings. The Board of Directors continues to progress the strategic review process, working with its
financial advisors, BMO Capital Markets Corp. and Moelis & Company, and legal advisors Vinson & Elkins LLP. As part of
the strategic review process, in early 2025, the company idled its Fairmont, Minnesota facility and launched a corporate
reorganization and cost reduction initiative that will significantly reduce selling, general and administrative expenses on an
ongoing basis. As part of this initiative, the company has identified early in 2025 approximately $30 million of financial
improvement annually, inclusive of savings from idling the Fairmont facility and realigning corporate and trade group selling,
general and administrative functions to reflect current strategic priorities, and is continuing to identify more opportunities that
may reduce selling, general and administrative functions further. As a result of the reorganization, the company expects to
take a one-time charge in the first quarter of 2025 of approximately $5 million to $7 million based on current estimates. There
is no deadline or definitive timetable for completion of the strategic review process, and there can be no assurances that the
process will result in a transaction or any other outcome. The company does not intend to make any further public comment
regarding the review until the Board has approved a specific action or otherwise determines that additional disclosure is
appropriate or required.
Industry Factors Affecting our Results of Operations
U.S. Ethanol Supply and Demand
According to the EIA, domestic ethanol production averaged 1.1 million barrels per day during 2024 and compared to
1.0 million per day in 2023. Refiner and blender input volume increased to 895 thousand barrels per day for 2024, which was
1% higher than the 888 thousand barrels per day in 2023. Gasoline demand was consistent compared to the prior year at
8,840 thousand barrels per day in 2024. U.S. domestic ethanol ending stocks increased by approximately 0.1 million barrels
compared to the prior year to 23.6 million barrels as of December 31, 2024. As of this filing, according to Prime the Pump,
there were approximately 3,724 retail stations selling E15 year-round, up from 3,244 at the beginning of the year.
Global Ethanol Supply and Demand
According to the USDA Foreign Agriculture Service, domestic ethanol exports through November 30, 2024, were
approximately 1,720 mmg, which was 35% higher than 1,274 mmg for the same period of 2023. Canada was the largest
export destination for U.S. ethanol accounting for approximately 36% of domestic ethanol export volume, driven in part by
their national clean fuel standard. The United Kingdom, India, Columbia, and the Netherlands accounted for approximately
32
13%, 10%, 7% and 7%, respectively, of U.S. ethanol exports. We currently estimate that net ethanol exports will range from
1.8 to 2.0 billion gallons in 2025, based on historical demand from a variety of countries and certain countries that seek to
improve their air quality, reduce greenhouse gas emissions through low carbon fuel programs and eliminate MTBE from their
own fuel supplies. Fluctuations in currencies relative to the U.S. Dollar could impact the U.S. ethanol competitiveness in the
global market.
Protein and Vegetable Oil Supply and Demand
We continue to believe that over time demand will outpace supply leading to higher co-product returns. Our dried
distillers grains and Ultra-High Protein ingredients compete against other ethanol producers domestically and abroad, as well
as with soybean meal, canola meal, and other protein feed ingredients. Likewise our distillers corn oil, which is a feedstock
for producing biodiesel, renewable diesel and to some extent SAF, competes against other vegetable oils such as soybean oil,
canola oil, and to some extent palm oil, as well as against waste oils such as used cooking oils, animal fats and tallow. While
global protein demand has continued to grow precipitously since the advent of our transformation, so too has the production
of vegetable proteins from multiple companies in an effort to capitalize on this trend, most notably in U.S. soy crushing
capacity, which has led to an over-supplied domestic market and compressed protein values. Soybean processing capacity in
the U.S. has been expanding to meet the rising demand for vegetable oils to produce renewable fuels. According to the
National Oilseed Processors Association, for the fourth quarter of 2024, soybean crush was 600 million bushels, up 26
million bushels from the 574 million bushels crushed during the fourth quarter of 2023. Soybean oil stocks were at 1.24
billion pounds as of December 31, 2024, which was slightly down from the 1.36 billion pounds of stocks as of December 31,
2023. Soybean meal production was 14.2 million short tons for the fourth quarter of 2024, up from the 13.5 million short tons
from the same period in the prior year.
Legislation and Regulation
We are sensitive to domestic and foreign government programs and policies that affect the supply and demand for
ethanol and other fuels, which in turn may impact the volume of ethanol and other products we handle. Over the years,
various bills and amendments have been proposed in the House and Senate, which would eliminate the RFS entirely,
eliminate the corn based ethanol portion of the mandate, lower the price of RINs and make it more difficult to sell fuel blends
with higher levels of ethanol. Bills have also been introduced to require or otherwise incentivize higher levels of octane
blending, allow for year-round sales of higher blends of ethanol, require car manufacturers to produce vehicles that can
operate on higher ethanol blends and provide incentives for reducing the CI of biofuels including ethanol. In addition, the
manner in which the EPA administers the RFS and related regulations can have a significant impact on the actual amount of
ethanol and other biofuels blended into the domestic fuel supply.
Federal and foreign mandates and state-level clean fuel standards supporting the use of renewable fuels are a significant
driver of ethanol demand in the U.S. Ethanol policies are influenced by concerns for the environment, diversifying the fuel
supply, supporting U.S. farmers and reducing the country’s dependence on foreign oil. Consumer acceptance of FFVs,
availability of higher ethanol blends and increased use of higher ethanol blends in non-FFVs may be necessary before ethanol
can achieve further growth in the U.S. light duty surface transportation fleet market share. In addition, expansion of clean fuel
standards in other states and countries, or a national LCFS could increase the demand for ethanol, depending on how they are
structured. Incentives for automakers to produce FFVs phased out in 2020, and the EPA's proposed Corporate Average Fuel
Economy (CAFE) standards further incentivize EV production. Sales of EVs in the U.S. were approximately 1.3 million
vehicles during 2024, which represented approximately 8.1% of new vehicles sales, up from 7.6% in 2023. Transition of the
light duty surface transportation fleet from internal combustion engines to EVs could decrease the demand for ethanol.
The IRA, which was signed into law on August 16, 2022, is a sweeping policy that could have many potential impacts on
our business which we are continuing to evaluate. The legislation (1) created a new Clean Fuel Production Credit, section
45Z of the Internal Revenue Code, of $0.02 per gallon per CI point reduction for any fuel below a 50 CI threshold from 2025
to 2027, which could impact our fuel ethanol, depending on the level of GHG reduction for each gallon; (2) created a new tax
credit for SAF, section 40B of the Internal Revenue Code, of $1.25 to $1.75 per gallon for 2023 and 2024, depending on the
GHG reduction for each gallon, that could possibly involve some of our renewable corn oil or low carbon ethanol as
feedstock through an ATJ pathway, depending on the life cycle analysis model being used (this credit expired after 2024 and
shifts to the 45Z Clean Fuel Production Credit, where it qualifies for up to $0.035 per gallon per CI point reduction below a
50 CI threshold); (3) expanded the carbon capture and sequestration credit, section 45Q of the Internal Revenue Code, to $85
for each metric ton of carbon dioxide sequestered, which could impact our carbon capture strategies, though it cannot be
claimed in conjunction with the 45Z Clean Fuel Production Credit, which could prove to be more valuable; (4) extended the
$1.00 per gallon biomass-based diesel tax credit (this credit expired after 2024 and shifts to the 45Z Clean Fuel Production
33
credit, where all non-SAF fuels qualify for $0.02 per gallon for each point of CI reduction under the 50 CI threshold); (5)
funded $500 million of biofuel blending infrastructure, which could impact the availability of higher level ethanol blended
fuel; (6) increased funding for climate-smart agriculture and working lands conservation programs for farmers by $20 billion;
and (7) provided credits for the production and purchase of EVs, which could impact the amount of internal combustion
engines built and sold longer term, and by extension impact the demand for liquid fuels including ethanol. There are
numerous additional clean energy credits included in this law, including investment tax credits for construction of clean
energy infrastructure, that could impact us and our overall competitiveness. Regulatory rulemaking for the administration of
these programs is underway, and the final regulations could impact many aspects of our business.
On April 30, 2024, the U.S. Department of Treasury issued regulatory guidance along with an updated GREET lifecycle
assessment model for the 40B SAF tax credit, which included a pathway for U.S. corn ethanol to qualify as a feedstock for
SAF if the carbon intensity is lowered through utilization of various technologies and practices, including carbon capture and
climate smart agriculture practices. On June 22, 2024, the USDA put out a Request for Information on the Production of
Biofuel Feedstocks using climate smart practices, which could inform rulemaking for the 45Z Clean Fuel Production Credit.
On January 10, 2025, the U.S. Department of Treasury issued a notice of intent to propose rulemaking on the 45Z Clean Fuel
Production Credit, which it published on February 3, 2025 in Internal Revenue Bulletin 2025-6, and on January 15, 2025 the
Department of Energy released an updated 45Z GREET LCA model for calculating CI values of various feedstocks and
finished fuels under 45Z. Additionally, on January 15, 2025, the USDA put forth interim rules around climate smart
agriculture for crops serving as feedstocks for biofuel production, including corn, soybeans and sorghum, though it was not
incorporated into Treasury’s 45Z proposed rulemaking at this time. While the proposed regulations are subject to change, and
the GREET model could continue to be updated, as of this filing the GREET model indicates that CCS could reduce the CI of
corn ethanol by 32 points, and that distillers corn oil used to produce biodiesel, renewable diesel or SAF has a lower CI score
relative to most other feedstocks. Additionally, the 45Z rulemaking excluded imported used cooking oil from qualifying for
the credit if used as a feedstock to produce on-road fuels, though it still qualifies to produce SAF.
The RFS sets a floor for biofuels use in the United States. In June 2023, the EPA finalized RVOs for 2024 and 2025,
setting the implied conventional ethanol levels at 15 billion gallons for 2024 and 2025. The EPA also proposed a modest
increase in biomass based diesel volumes over the three years, setting the volumes at 2.82 billion for 2023, 3.04 billion for
2024 and 3.35 billion for 2025. The EPA also indicated that corn kernel fiber would contribute to the finalized cellulosic
volumes, and could move to approve registrations that have been languishing for years at the agency. The EPA also removed
a proposed e-RIN program to support EVs from the final rule, but indicated they may move forward with it in a separate
rulemaking. The EPA was required to propose RVOs for 2026 by November 2024, but the administration indicated on July 8,
2024 that it intends to propose RVOs for 2026 and potentially additional years in March 2025, and finalize them in December
2025. The new administration has not indicated an updated timeline for these rules.
Under the RFS, RINs impact supply and demand. The EPA assigns individual refiners, blenders, and importers the
volume of renewable fuels they are obligated to use in each annual RVO based on their percentage of total production of
domestic transportation fuel sales. Obligated parties use RINs to show compliance with the RFS mandated volumes. Ethanol
producers assign RINs to each gallon of renewable fuel they produce and the RINs are detached when the renewable fuel is
blended with transportation fuel domestically. Market participants can trade the detached RINs in the open market. The
market price of detached RINs can affect the price of ethanol in certain markets and can influence purchasing decisions by
obligated parties. SREs can reduce or waive entirely the obligation for a refinery, which has the practical effect of reducing
the RVO, and by extension the number of RINs that need to be retired, which can impact their values and ultimately blending
levels of renewable fuels. There are multiple on-going legal challenges to how the EPA has handled SREs and RFS
rulemakings. On October 21, 2024, the U.S. Supreme Court agreed to review the various Circuit Court rulings on SREs to
determine the proper venue.
The One-Pound Waiver, which was extended in May 2019 to allow E15 to be sold year-round to all vehicles model year
2001 and newer, was challenged in an action filed in Federal District Court for the D.C. Circuit. On July 2, 2021, the Circuit
Court vacated the EPA’s rule so the future of summertime, defined as June 1 to September 15, sales of E15 is uncertain. The
Supreme Court subsequently declined to hear a challenge to this ruling. In 2022, the EPA issued emergency waivers to allow
for the continued sale of E15 during the summer months and similar summertime waivers have been issued each year since
then, with the 2024 driving season marking the sixth consecutive year that E15 is able to be sold year-round nationwide, with
the exception of California which has not approved the fuel. The EPA has also allowed for the elimination of the One-Pound
Waiver for E10 in several Midwestern states beginning with the 2025 summer driving season, which would have the practical
effect of allowing for E15 to be sold year- round in the following states: Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio,
South Dakota and Wisconsin.
34
In October 2019, the White House directed the USDA and EPA to move forward with rulemaking to expand access to
higher blends of biofuels. This includes funding for infrastructure, labeling changes and allowing E15 to be sold through E10
infrastructure. The USDA rolled out the Higher Blend Infrastructure Incentive Program in the summer of 2020, providing
competitive grants to fuel terminals and retailers for installing equipment capable of dispensing higher blends of ethanol and
biodiesel. In December 2021, the USDA announced it would administer another infrastructure grant program. The IRA,
signed into law in 2022, provided for an additional $500 million in USDA grants for biofuel infrastructure. On June 26, 2023,
the USDA announced the initial $50 million in awards, and laid out a process for distributing the remaining $450 million,
with $90 million being made available each quarter.
A string of 2024 U.S. Supreme Court decisions, namely Loper Bright Enterprises v. Raimondo, SEC v. Jarkesy and
Corner Post, Inc. v. Board of Governors of the Federal Reserve, have redefined the power of federal agencies, as well as
overturned the important principle of administrative law called "Chevron deference," based on a landmark case, Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc. The Chevron deference was a doctrine of judicial deference to
administrative interpretations. The general shift in power from agencies to the judicial system resulting from these decisions
could impact various regulatory rules affecting our business in ways that could affect our business, prospects and operations,
and our financial performance positively or negatively.
Environmental and Other Regulation
Our operations are subject to environmental regulations, including those that govern the handling and release of ethanol,
crude oil and other liquid hydrocarbon materials. Compliance with existing and anticipated environmental laws and
regulations may increase our overall cost of doing business, including capital costs to construct, maintain, operate and
upgrade equipment and facilities. Our business may also be impacted by domestic and foreign government policies, such as
incentives, tariffs, duties, subsidies, import and export restrictions and outright embargos.
Variability of Commodity Prices
Our business is highly sensitive to commodity price fluctuations, particularly for corn, ethanol, renewable corn oil,
distillers grains, Ultra-High Protein, and natural gas, which are impacted by factors that are outside of our control, including
weather conditions, corn yield, changes in domestic and global ethanol supply and demand, government programs and
policies and the price of crude oil, gasoline and substitute fuels. We use various financial instruments to manage and reduce
our exposure to price variability. For more information about our commodity price risk, refer to Item 7A. - Qualitative and
Quantitative Disclosures About Market Risk, Commodity Price Risk in this report.
Effects of Inflation
We do not expect inflation to have a material impact on our future results of operations. However, inflation has and may
continue to impact the interest rate environment in which we operate, resulting in a higher cost of capital. Refer to Item 7A. -
Qualitative and Quantitative Disclosures About Market Risk, Commodity Price Risk in this report for additional information
related to interest rate risk.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements requires that we use estimates that affect the reported assets,
liabilities, revenue and expense and related disclosures for contingent assets and liabilities. We base our estimates on
experience and assumptions we believe are proper and reasonable. While we regularly evaluate the appropriateness of these
estimates, actual results could differ materially from our estimates. The following accounting policies, in particular, may be
impacted by judgments, assumptions and estimates used in the preparation of our consolidated financial statements.
Derivative Financial Instruments
We use 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. We monitor and manage this exposure as part of our
overall risk management policy to reduce the adverse effect market volatility may have on our operating results. We may
hedge these commodities as one way to mitigate risk; however, there may be situations when these hedging activities
themselves result in losses.
35
By using derivatives to hedge exposures to changes in commodity prices, we are exposed to credit and market risk. Our
exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the terms of the
derivative contract. We minimize our 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. We
manage market risk by incorporating parameters to monitor exposure within our risk management strategy, which limits the
types of derivative instruments and strategies we can use and the degree of market risk we can take using derivative
instruments.
Forward contracts are recorded at fair value unless the contracts qualify for, and we elect, normal purchase or sale
exceptions. Changes in fair value are recorded in operating income unless the contracts qualify for, and we elect, cash flow
hedge accounting treatment.
Certain qualifying derivatives related to ethanol production and agribusiness and energy services are designated as cash
flow hedges. We evaluate 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, we hedge our exposure to changes in inventory values and designate 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. 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.
Please refer to Note 10 - Derivative Financial Instruments included in the notes to the audited consolidated financial
statements included herein for further details.
Accounting for Income Taxes
Income taxes are accounted for under the asset and liability method in accordance with GAAP. Deferred tax assets and
liabilities are recognized for future tax consequences between existing assets and liabilities and their respective tax basis, and
for net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to be applied to taxable income in years temporary differences are expected to be recovered or settled. The effect of
a tax rate change is recognized in the period that includes the enactment date. The realization of deferred tax assets depends
on the generation of future taxable income during the periods in which temporary differences become deductible.
Management considers scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning
strategies to make this assessment. A valuation allowance is recorded by the company when it is more likely than not that
some portion or all of a deferred tax asset will not be realized. In making such a determination, management considers the
positive and negative evidence to support the need for, or reversal of, a valuation allowance. The weight given to the potential
effects of positive and negative evidence is based on the extent it can be objectively verified.
To account for uncertainty in income taxes, we gauge the likelihood of a tax position based on the technical merits of the
position, perform a subsequent measurement related to the maximum benefit and degree of likelihood, and determine the
benefit to be recognized in the financial statements, if any.
Please refer to Note 15 - Income Taxes included in the notes to the audited consolidated financial statements included
herein for further details.
Recently Issued Accounting Pronouncements
For information related to recent accounting pronouncements, see Note 2 – Summary of Significant Accounting Policies
included in the notes to the audited consolidated financial statements included herein.
36
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Components of Revenues and Expenses
Revenues. For our ethanol production segment, our revenues are derived primarily from the sale of ethanol, distillers
grains, Ultra-High Protein and renewable corn oil. For our agribusiness and energy services segment, our primary sources of
revenue include sales of ethanol, distillers grains and renewable corn oil that we market for our ethanol plants, in which we
earn a marketing fee, sales of ethanol and Ultra-High Protein we market for a third-party and sales of other commodities
purchased in the open market. The vast majority of our revenues are from forward contracts accounted for as derivatives
under ASC 815 as disclosed in the tables within Note 3 - Revenue and Note 10 - Derivative Financial Instruments included in
the notes to the audited consolidated financial statements included herein. Revenues include net gains or losses from
derivatives related to products sold.
Cost of Goods Sold. For our ethanol production segment, cost of goods sold includes materials, direct labor, shipping and
plant overhead costs. Materials include the cost of corn feedstock, denaturant and process chemicals. Corn feedstock costs
include gains and losses on related derivative financial instruments not designated as cash flow hedges, inbound freight
charges, inspection costs and transfer costs, as well as reclassifications of gains and losses on cash flow hedges from
accumulated other comprehensive income or loss. Direct labor includes all compensation and related benefits of personnel
involved in ethanol production. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of
goods sold. Plant overhead consists primarily of plant utilities, repairs and maintenance, and outbound freight charges.
For our agribusiness and energy services segment, purchases of ethanol, distillers grains, renewable corn oil and grain
are the primary component of cost of goods sold. Fair value hedged inventories and forward purchase and sale contracts are
valued at market prices when available or other market quotes adjusted for differences, such as transportation, between the
exchange-traded market and local markets where the terms of the contracts are based. Changes in the market value of grain
inventories, forward purchase and sale contracts, and exchange-traded futures and options contracts are recognized as a
component of cost of goods sold.
Selling, General and Administrative Expenses. Selling, general and administrative expenses are recognized at the
operating segment and corporate level. These expenses consist of employee salaries, incentives and benefits; office expenses;
director fees; and professional fees for accounting, legal, consulting and investor relations services. Personnel costs, which
include employee salaries, incentives and benefits, as well as severance and separation costs, are the largest expenditure.
Selling, general and administrative expenses that cannot be allocated to an operating segment are referred to as corporate
activities.
Gain on Sale of Assets. We completed the sale of the terminal located in Birmingham, Alabama in September 2024. The
sale of the terminal resulted in a pretax gain of $30.7 million recorded at the corporate level. We also completed the sale of
the ethanol plant located in Atkinson, Nebraska in September 2023. The sale of Atkinson resulted in a pretax gain of $4.1
million recorded at the corporate level.
Other Income (Expense). Other income (expense) includes interest earned, interest expense and other non-operating
items, as well as $3.4 million and $27.7 million grants received from the USDA for the years-ended December 31, 2023 and
2022, respectively, related to the Biofuel Producer Program.
Income (Loss) from Equity Method Investees, Net of Income Taxes. Income (loss) from equity method investees, net of
income taxes represents our proportional share of earnings from our equity method investees.
Results of Operations
We maintained an average utilization rate of approximately 94% of capacity during 2024, compared with 89% of
capacity for the prior year. Our operating strategy is to transform our company to a value-add agricultural technology
company creating lower carbon, high-value ingredients from existing resources. Depending on the margin environment, we
may exercise operational discretion that results in reductions in production volumes. It is possible that throughput volumes
could fluctuate in the future, depending on various factors that drive each biorefinery’s variable contribution margin,
including future driving and gasoline demand for the industry, demand for valuable co-products we produce, and the supply
37
and pricing of renewable feedstocks needed to operate our biorefineries.
Comparability
The following summarizes various events that affect the comparability of our operating results for the past three years:
•
September 2024
Sale of terminal located in Birmingham, Alabama
•
September 2023
Sale of ethanol plant located in Atkinson, Nebraska
•
May 2022
Received a $27.7 million grant from the USDA as part of the Biofuel Producer Program. An
additional $3.4 million was received in July 2023.
A discussion regarding our financial condition and results of operations for the year ended December 31, 2023,
compared to the year ended December 31, 2022, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, filed with the SEC on February 9, 2024.
Segment Results
We report 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, 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 remaining terminal 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 gain on sale of assets and 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, our operating segments do business with each other. For example, our
agribusiness and energy services segment procures grain and natural gas and sells products, including ethanol, distillers
grains, Ultra-High Protein, and renewable corn oil of our 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 our consolidated results since the
revenues and corresponding costs are eliminated.
When we evaluate segment performance, we review the following segment information as well as earnings before
interest expense, income taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA.
38
The selected operating segment financial information are as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Revenues
Ethanol production
Revenues from external customers
$
2,063,382 $
2,819,986 $
3,074,195
Intersegment revenues
3,707
4,555
4,445
Total segment revenues
2,067,089
2,824,541
3,078,640
Agribusiness and energy services
Revenues from external customers
395,414
475,757
588,654
Intersegment revenues
25,693
25,146
26,961
Total segment revenues
421,107
500,903
615,615
Revenues including intersegment activity
2,488,196
3,325,444
3,694,255
Intersegment eliminations
(29,400)
(29,701)
(31,406)
$
2,458,796 $
3,295,743 $
3,662,849
Year Ended December 31,
2024
2023
2022
Cost of goods sold
Ethanol production (1)(2)
$
1,983,460 $
2,705,917 $
3,018,625
Agribusiness and energy services
374,286
454,776
562,950
Intersegment eliminations
(29,400)
(29,701)
(31,406)
$
2,328,346 $
3,130,992 $
3,550,169
Year Ended December 31,
2024
2023
2022
Gross margin
Ethanol production (1)(2)
$
83,629 $
118,624 $
60,015
Agribusiness and energy services
46,821
46,127
52,665
$
130,450 $
164,751 $
112,680
Year Ended December 31,
2024
2023
2022
Depreciation and amortization
Ethanol production
$
82,784 $
92,712 $
85,638
Agribusiness and energy services
2,185
2,360
3,466
Corporate activities (3)
5,618
3,172
3,594
$
90,587 $
98,244 $
92,698
39
Year Ended December 31,
2024
2023
2022
Operating income (loss)
Ethanol production (2)
$
(40,758) $
(19,958) $
(66,485)
Agribusiness and energy services
28,156
28,100
36,415
Corporate activities (4)
(34,857)
(69,720)
(68,878)
$
(47,459) $
(61,578) $
(98,948)
(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)
Ethanol production includes an inventory lower of cost or net realizable value adjustment of $2.1 million, $2.6 million, and $12.3 million for the
years-ended December 31, 2024, 2023, and 2022, respectively.
(3)
Depreciation and amortization for corporate activities includes impairment of a research and development technology intangible asset of $3.5
million for the year-ended December 31, 2024.
(4)
Corporate activities for the years-ended December 31, 2024 and 2023 include a $30.7 million and $4.1 million gain on sale of assets, respectively.
We use EBITDA, adjusted EBITDA, and segment EBITDA as measures of profitability to compare the financial
performance of our reportable segments and manage those segments. EBITDA is defined as earnings before interest expense,
income taxes, depreciation and amortization excluding the amortization of right-of-use assets and debt issuance costs.
Adjusted EBITDA includes adjustments related to other income associated with the USDA COVID-19 relief grants, gains on
sale of assets, and our proportional share of EBITDA adjustments of our equity method investees. We believe EBITDA,
adjusted EBITDA and segment EBITDA are useful measures to compare our performance against other companies. These
measures should not be considered an alternative to, or more meaningful than, net income, which is prepared in accordance
with GAAP. EBITDA, adjusted EBITDA, and segment EBITDA calculations may vary from company to company.
Accordingly, our computation of EBITDA, adjusted EBITDA, and segment EBITDA may not be comparable with a similarly
titled measure of other companies.
The following table reconciles net loss including noncontrolling interest to adjusted EBITDA (in thousands):
Year Ended December 31,
2024
2023
2022
Net loss
$
(81,189) $
(76,299) $
(103,377)
Interest expense
33,095
37,703
32,642
Income tax expense (benefit), net of equity method income taxes
5,153
(5,617)
4,747
Depreciation and amortization (1)
90,587
98,244
92,698
EBITDA
47,646
54,031
26,710
Other income (2)
—
(3,440)
(27,712)
Gain on sale of assets
(30,723)
(5,265)
—
Proportional share of EBITDA adjustments to equity method investees
1,792
180
180
Adjusted EBITDA
$
18,715 $
45,506 $
(822)
(1)
Excludes the amortization of operating lease right-of-use assets and amortization of debt issuance costs.
(2)
Other income for the years-ended December 31, 2023 and 2022, include grants received from the USDA related to the Biofuel Producer Program
of $3.4 million and $27.7 million, respectively.
40
The following table reconciles segment EBITDA to consolidated adjusted EBITDA (in thousands):
Year Ended December 31,
2024
2023
2022
Adjusted EBITDA:
Ethanol production (1)
$
39,645 $
78,561 $
47,390
Agribusiness and energy services
31,935
31,689
39,798
Corporate activities (2)
(23,934)
(56,219)
(60,478)
EBITDA
47,646
54,031
26,710
Other income (3)
—
(3,440)
(27,712)
Gain on sale of assets
(30,723)
(5,265)
—
Proportional share of EBITDA adjustments to equity method investees
1,792
180
180
Adjusted EBITDA
$
18,715 $
45,506 $
(822)
(1)
Ethanol production includes an inventory lower of cost or net realizable value adjustment of $2.1 million, $2.6 million, and $12.3 million for the
years-ended December 31, 2024, 2023, and 2022, respectively.
(2)
Corporate activities for the years-ended December 31, 2024 and 2023 include a $30.7 million and $4.1 million gain on sale of assets, respectively.
(3)
Other income for the years-ended December 31, 2023 and 2022 include grants received from the USDA related to the Biofuel Producer Program
of $3.4 million and $27.7 million, respectively.
Total assets by segment are as follows (in thousands):
Year Ended December 31,
2024
2023
Total assets (1)
Ethanol production
$
1,234,635 $
1,275,562
Agribusiness and energy services
412,006
413,937
Corporate assets
143,716
254,300
Intersegment eliminations
(8,183)
(4,477)
$
1,782,174 $
1,939,322
(1)
Asset balances by segment exclude intercompany balances.
Year Ended December 31, 2024 compared with the Year Ended December 31, 2023
Consolidated Results
Consolidated revenues decreased $836.9 million in 2024 compared with 2023 primarily due to lower weighted average
selling prices on ethanol, distillers grains and renewable corn oil, partially offset by higher volumes sold on ethanol and
renewable corn oil within our ethanol production segment as described below. Revenues were also lower within our
agribusiness and energy services segment primarily due to lower weighted average ethanol and natural gas trading prices.
Net loss increased $4.9 million in 2024 compared with 2023 primarily due to lower margins in our ethanol production
segment partially offset by a gain on the sale of assets from the Birmingham Transaction and decreased depreciation expense.
Adjusted EBITDA decreased $26.8 million in 2024 compared with 2023 primarily due to lower margins in our ethanol
production segment, partially offset by lower corporate personnel costs. Interest expense decreased $4.6 million in 2024
compared with 2023 primarily due to lower debt balances. Income tax expense, including income tax benefit from equity
method investees, was $5.2 million in 2024 compared to an income tax benefit of $5.6 million in 2023 primarily due to an
agreement in-principle with the IRS Independent Office of Appeals covering the tax years 2013 through 2018 in the fourth
quarter 2024.
The following discussion provides greater detail about our segment performance.
41
Ethanol Production Segment
Key operating data for our ethanol production segment is as follows:
Year Ended December 31,
2024
2023
Ethanol (thousands of gallons)
846,226
840,819
Distillers grains (thousands of equivalent dried tons)
1,890
1,933
Ultra-High Protein (thousands of tons)
248
223
Renewable corn oil (thousands of pounds)
290,801
279,861
Corn (thousands of bushels)
289,454
289,267
Revenues in our ethanol production segment decreased $757.5 million in 2024 compared with 2023 primarily due to
lower weighted average selling prices on ethanol, distillers grains and renewable corn oil resulting in decreased revenues of
$614.5 million, $114.7 million and $49.8 million, respectively, partially offset by higher ethanol and renewable corn oil
volumes sold resulting in increased revenues of $13.6 million and $7.0 million, respectively. Revenues also increased as a
result of hedging activities by $2.7 million.
Cost of goods sold in our ethanol production segment decreased $722.5 million for 2024 compared with 2023 primarily
due to lower weighted average corn prices, lower ethanol volumes purchased and lower input costs related to natural gas
resulting in decreased costs of $502.5 million, $166.1 million and $83.6 million, respectively, partially offset by higher
production labor costs and higher repairs and maintenance costs resulting in increased costs of $15.9 million and $10.6
million, respectively.
Operating loss in our ethanol production segment increased $20.8 million in 2024 compared with 2023 primarily due to
decreased margins on ethanol production as outlined above. Depreciation and amortization expense for the ethanol
production segment was $82.8 million for 2024 compared with $92.7 million during 2023, with the decrease primarily due to
certain assets becoming fully depreciated.
Agribusiness and Energy Services Segment
Revenues in our agribusiness and energy services segment decreased $79.8 million while operating income increased
$0.1 million in 2024 compared with 2023. The decrease in revenues was primarily due to lower weighted average ethanol and
natural gas trading prices.
Intersegment Eliminations
Intersegment eliminations of revenues decreased by $0.3 million for 2024 compared with 2023 primarily due to
decreased freight revenue associated with the ethanol production segment.
Corporate Activities
Operating loss was impacted by a decrease in corporate activities of $34.9 million for 2024 compared with 2023, which
was primarily due to an increase in gain on sale of assets and a decrease in personnel costs compared to the same period in
2023.
Income Taxes
We recorded income tax expense, including income tax benefit from equity method investees of $5.2 million for 2024
compared to an income tax benefit of $5.6 million in 2023. The increase in the amount of tax expense recorded for 2024 was
primarily due to an agreement in-principle with the IRS Independent Office of Appeals covering the tax years 2013 through
2018 in the fourth quarter 2024.
42
Liquidity and Capital Resources
Our principal sources of liquidity include cash generated from operating activities and bank credit facilities. We fund our
operating expenses and service debt primarily with operating cash flows. Capital resources for maintenance and growth
expenditures are funded by a variety of sources, including cash generated from operating activities, borrowings under credit
facilities, or issuance of public or private debt or equity securities. Our ability to access capital markets for debt under
reasonable terms depends on our financial condition, credit ratings and market conditions. We believe that our ability to
obtain financing at reasonable rates based on these factors remains sufficient and provides a solid foundation to meet our
future liquidity and capital resource requirements.
On December 31, 2024, we had $173.0 million in cash and cash equivalents and $36.4 million in restricted cash. We also
had $200.7 million available under our committed revolving credit agreement, subject to restrictions or other lending
conditions. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from
distribution. At December 31, 2024, our subsidiaries had approximately $12.8 million of net assets that were not available to
use in the form of dividends, loans or advances due to restrictions contained in their credit facilities.
Net cash provided by (used in) operating activities was $(30.0) million in 2024 compared to $56.3 million in 2023.
Operating activities compared to the prior year were primarily affected by an increase in cash used for inventory and lower
collections of accounts receivable. Net cash used in investing activities was $62.1 million in 2024 compared to $106.9
million in 2023 primarily due to higher proceeds from the sale of assets, lower capital expenditures and lower investments in
equity method investees. Net cash used in financing activities was $77.4 million in 2024 compared to $71.0 million in 2023
primarily due to the retirement of debt related to the partnership and extinguishment of the partnership's non-controlling
interest, offset by higher borrowings on our revolver and lower distributions paid as a result of the dissolution of the
partnership.
Additionally, Green Plains Finance Company, Green Plains Trade, Green Plains Grain and Green Plains Commodity
Management use revolving credit facilities to finance working capital requirements. We frequently draw from and repay
these facilities which results in significant cash movements reflected on a gross basis within financing activities as proceeds
from and payments on short-term borrowings.
We incurred capital expenditures of $95.1 million in 2024 primarily for the clean sugar expansion project at Shenandoah
and for various other capital projects. The current projected estimate for capital spending for 2025 is approximately $20
million to $35 million, which is subject to review prior to the initiation of any project, and expected to be financed with cash
on hand and with cash provided by operating activities. This excludes an estimated $110 million of additional expenditures
related to our carbon capture and sequestration projects expected to occur in 2025 and to be funded through project related
financing.
Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains (including
Ultra-High Protein), renewable corn oil and natural gas. We use derivative financial instruments to reduce the market risk
associated with fluctuations in commodity prices. Sudden changes in commodity prices may require cash deposits with
brokers for margin calls or significant liquidity with little advanced notice to meet margin calls, depending on our open
derivative positions. We continuously monitor our exposure to margin calls and believe we will continue to maintain
adequate liquidity to cover margin calls from our operating results and borrowings.
Our board of directors authorized a share repurchase program of up to $200.0 million of our common stock. Under the
program, we may repurchase shares in open market transactions, privately negotiated transactions, accelerated share buyback
programs, tender offers or by other means. The timing and amount of repurchase transactions are determined by our
management based on market conditions, share price, legal requirements and other factors. The program may be suspended,
modified or discontinued at any time without prior notice. We did not repurchase any common stock in 2024, 2023 or 2022.
To date, we have repurchased approximately 7.4 million shares of common stock for approximately $92.8 million under the
program.
We believe we have sufficient working capital for our existing operations. A continued sustained period of unprofitable
operations, however, may strain our liquidity. We may sell additional assets or equity or borrow capital to improve or
preserve our liquidity, expand our business or acquire businesses.
43
Debt
We were in compliance with our debt covenants at December 31, 2024. Based on our forecasts, we anticipate we will
maintain compliance at each of our subsidiaries for the next twelve months and have sufficient liquidity available on a
consolidated basis to resolve noncompliance. We cannot provide assurance that actual results will approximate our forecasts
or that we will inject the necessary capital into a subsidiary to maintain compliance with its respective covenants. In the event
a subsidiary is unable to comply with its debt covenants, the subsidiary’s lenders may determine that an event of default has
occurred, and following notice, the lenders may terminate the commitment and declare the unpaid balance due and payable.
Corporate Activities
In March 2021, we issued $230.0 million of unsecured 2.25% convertible senior notes due in 2027, or the 2.25% notes.
The 2.25% notes bear interest at a rate of 2.25% per year, payable on March 15 and September 15 of each year. The initial
conversion rate is 31.6206 shares of our common stock per $1,000 principal amount of 2.25% notes (equivalent to an initial
conversion price of approximately $31.62 per share of our common stock), representing an approximately 37.5% premium
over the offering price of our common stock. The conversion rate is subject to adjustment upon the occurrence of certain
events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and
warrants; spinoffs; or a tender or exchange offering. In addition, we may be obligated to increase the conversion rate for any
conversion that occurs in connection with certain corporate events, including our calling the 2.25% notes for redemption. We
may settle the 2.25% notes in cash, common stock or a combination of cash and common stock. At December 31, 2024, the
outstanding principal balance on the 2.25% notes was $230.0 million.
In June 2019, we issued $115.0 million of 4.00% convertible senior notes due in 2024, or the 4.00% notes. On May 25,
2022, we gave notice calling for the redemption of our outstanding 4.00% notes, totaling an aggregate principal amount of
$64.0 million. The final conversion rate was increased to 66.4178 shares of common stock per $1,000 of principal. From July
1, 2022 through July 8, 2022, the remaining $64.0 million of the 4.00% notes were converted into approximately 4.3 million
shares of common stock. Common stock held as treasury shares were exchanged for the 4.00% notes. Pursuant to the
guidance within ASC 470, Debt, we recorded the exchanges as a conversion. The 4.00% notes were retired effective July 8,
2022.
In August 2016, we issued $170.0 million of 4.125% convertible senior notes due in 2022, or the 4.125% notes, which
were senior, unsecured obligations. During August 2022, we entered into four privately negotiated exchange agreements with
certain noteholders of the 4.125% notes to exchange approximately $32.6 million aggregate principal amount for
approximately 1.2 million shares of our common stock. Additionally, on September 1, 2022, approximately $1.7 million
aggregate principal amount of the 4.125% notes were settled through a combination of $1.7 million in cash and
approximately 15 thousand shares of our common stock, and the remaining $23 thousand aggregate principal amount and
accrued interest were settled in cash. The 4.125% notes were fully retired effective September 1, 2022.
Ethanol Production Segment
On February 9, 2021, Green Plains SPE LLC, a wholly-owned special purpose subsidiary and parent of Green Plains
Obion and Green Plains Mount Vernon issued $125.0 million of junior secured mezzanine notes due February 2026 with
BlackRock. These notes accrue interest at an annual rate of 11.75% and will mature on February 9, 2026. The company
believes that it has adequate access to capital to source appropriate funding to refinance or extinguish the junior secured
notes.
Green Plains Shenandoah, a wholly-owned subsidiary, has a $75.0 million secured loan agreement, which matures on
September 1, 2035. During the second quarter of 2024, the agreement was modified to remove the Wood River facility from
the assets considered to be secured under the loan agreement and Green Plains Wood River was removed as a counterparty to
the loan agreement. At December 31, 2024, the outstanding principal balance was $71.6 million on the loan and the interest
rate was 5.77%.
Green Plains Partners had a term loan to fund working capital, capital expenditures and other general partnership
purposes. Interest on the term loan was based on 3-month SOFR plus 8.26%. On September 30, 2024, the proceeds from the
Birmingham Transaction were used to repay the outstanding principal and interest of the loan in full. Prepayments totaling
$56.0 million, $3.0 million and $1.0 million were made during the years ended December 31, 2024, 2023 and 2022,
respectively.
44
We also have small equipment financing loans, finance leases on equipment or facilities, and other forms of debt
financing.
Agribusiness and Energy Services Segment
Green Plains Finance Company, Green Plains Grain and Green Plains Trade have total senior secured revolving
commitments of $350.0 million and an accordion feature whereby amounts available under the facility may be increased by
up to $100.0 million of new lender commitments subject to certain conditions. The facility matures in March 2027. Each
SOFR rate loan shall bear interest for each day at a rate per annum equal to the Term SOFR rate for the outstanding period
plus a Term SOFR adjustment and an applicable margin of 2.25% to 2.50%, which is dependent on undrawn availability
under the facility. Each base rate loan shall bear interest at a rate per annum equal to the base rate plus the applicable margin
of 1.25% to 1.50%, which is dependent on undrawn availability under the facility. The unused portion of the facility is also
subject to a commitment fee of 0.275% to 0.375%, dependent on undrawn availability. At December 31, 2024, the
outstanding principal balance was $133.5 million on the facility and the interest rate was 7.88%.
Green Plains Commodity Management has an uncommitted $40.0 million secured revolving credit facility to finance
margins related to its hedging programs. During the first quarter of 2023, this revolving credit facility was extended five
years to mature on April 30, 2028. Advances are subject to variable interest rates equal to SOFR plus 1.75%. At
December 31, 2024, the outstanding principal balance was $7.3 million on the facility and the interest rate was 6.12%.
Green Plains Grain has a short-term inventory financing agreement with a financial institution. The company has
accounted for the agreement as short-term notes, rather than revenues, and has elected the fair value option to offset
fluctuations in market prices of the inventory. This agreement is subject to negotiated variable interest rates. The company
had no outstanding short-term notes payable related to the inventory financing agreement as of December 31, 2024.
Refer to Note 11 – Debt included in the notes to the audited consolidated financial statements included herein for more
information about our debt.
Contractual Obligations and Commitments
In addition to debt, our material future obligations include certain lease agreements and contractual and purchase
commitments related to commodities, storage and transportation. Aggregate minimum lease payments under the operating
lease agreements for future fiscal years as of December 31, 2024 totaled $82.3 million. As of December 31, 2024, we had
contracted future purchases of grain, ethanol, distillers grains, and natural gas valued at approximately $196.6 million, future
commitments for storage and transportation valued at approximately $38.9 million, and accumulated commitments related to
the construction of carbon capture and sequestration equipment at our three Nebraska plants of $17.9 million. Refer to Note
16 – Commitments and Contingencies included in the notes to consolidated financial statements for more information.
Item 7A. Qualitative and Quantitative Disclosures About Market Risk.
We use various financial instruments to manage and reduce our exposure to various market risks, including changes in
commodity prices and interest rates. We conduct the majority of our business in U.S. dollars and are not currently exposed to
material foreign currency risk.
Interest Rate Risk
We are exposed to interest rate risk through our loans which bear interest at variable rates. Interest rates on our variable-
rate debt are based on the market rate for the lender’s prime rate or SOFR. At December 31, 2024, we had $578.6 million in
debt, $140.8 million of which had variable interest rates. A 10% increase in interest rates would affect our interest cost by
approximately $1.4 million per year.
Refer to Note 11 – Debt included in the notes to the audited consolidated financial statements included herein for more
information about our debt.
Commodity Price Risk
Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains (including Ultra-
High Protein), renewable corn oil and natural gas. Ethanol prices are sensitive to world crude oil supply and demand, the
45
price of crude oil, gasoline, corn, the price of substitute fuels, refining capacity and utilization, government regulation and
consumer demand for alternative fuels. Corn prices are affected by weather conditions, yield, changes in domestic and global
supply and demand, and government programs and policies. Distillers grains and Ultra-High Protein prices are impacted by
livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production.
Renewable corn oil prices are impacted by prices for renewable diesel fuel, diesel fuel and competing feedstocks. Natural gas
prices are influenced by severe weather in the summer and winter and hurricanes in the spring, summer and fall. Other factors
include North American energy exploration and production, and the amount of natural gas in underground storage during
injection and withdrawal seasons.
To reduce the risk associated with fluctuations in the price of ethanol, corn, distillers grains, Ultra-High Protein,
renewable corn oil and natural gas, at times we use forward fixed-price physical contracts and derivative financial
instruments, such as futures and options executed on the Chicago Board of Trade, the New York Mercantile Exchange and
the Chicago Mercantile Exchange. We focus on locking in favorable operating margins, when available, using a model that
continually monitors market prices for corn, natural gas and other inputs relative to the price for ethanol and distillers grains
at each of our production facilities. We create offsetting positions using a combination of forward fixed-price purchases, sales
contracts and derivative financial instruments. As a result, we frequently have gains on derivative financial instruments that
are offset by losses on forward fixed-price physical contracts or inventories and vice versa. Our results are impacted by a
mismatch of gains or losses associated with the derivative instrument during a reporting period when the physical commodity
purchases or sale has not yet occurred. For the year ended December 31, 2024, revenues included net gains of $9.6 million
and cost of goods sold included net gains of $0.2 million associated with derivative instruments.
Ethanol Production Segment
In the ethanol production segment, net gains and losses from settled derivative instruments are offset by physical
commodity purchases or sales to achieve the intended operating margins. To reduce commodity price risk caused by market
fluctuations, we enter into exchange-traded futures and options contracts that serve as economic hedges.
Our exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price
purchase and sale contracts and derivatives, is based on the estimated net income effect resulting from a hypothetical 10%
change in price for the next 12 months starting on December 31, 2024, are as follows (in thousands):
Commodity
Estimated Total Volume
Requirements for the
Next 12 Months (1)
Unit of
Measure
Net Income Effect of
Approximate 10%
Change in Price
Ethanol
903,000
Gallons
$118,410
Corn
310,000
Bushels
$104,701
Distillers grains (2)
2,200
Tons (3)
$24,266
Renewable corn oil
310,000
Pounds
$9,869
Natural gas
26,400
MmBTU
$5,352
(1)
Estimated volumes assume production at full capacity.
(2)
Includes Ultra-High Protein
(3)
Distillers grains quantities are stated on an equivalent dried ton basis.
Agribusiness and Energy Services Segment
In the agribusiness and energy services segment, our physical purchase and sale contracts and derivatives are marked to
market. Our inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories. To
reduce commodity price risk caused by market fluctuations for purchase and sale commitments of grain and grain held in
inventory, we enter into exchange-traded futures and options contracts that serve as economic hedges.
The market value of exchange-traded futures and options used for hedging are highly correlated with the underlying
market value of grain inventories and related purchase and sale contracts for grain. The less correlated portion of inventory
and purchase and sale contract market values, known as basis, is much less volatile than the overall market value of
46
exchange-traded futures and tends to follow historical patterns. We manage this less volatile risk by constantly monitoring
our position relative to the price changes in the market. Inventory values are affected by the month-to-month spread in the
futures markets. These spreads are also less volatile than the overall market value of our inventory and tend to follow
historical patterns, but cannot be mitigated directly. Our accounting policy for futures and options, as well as the underlying
inventory held for sale and purchase and sale contracts, is to reflect their current market values and include gains and losses
in the consolidated statement of operations.
Item 8. Financial Statements and Supplementary Data.
The required consolidated financial statements and accompanying notes are listed in Part IV, Item 15.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure information that must be disclosed in the reports we
file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the SEC’s rules and forms, and that such information is accumulated and communicated to management, as appropriate, to
allow timely decisions regarding required financial disclosure. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives. Management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
Under the supervision of and participation of our chief executive officer and chief financial officer, management carried
out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of
December 31, 2024, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act and concluded that our disclosure
controls and procedures were effective.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining effective internal control over financial reporting as defined
in Rule 13a-15(f) of the Exchange Act. Our internal control system is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements in accordance with GAAP.
Under the supervision and participation of our chief executive officer and chief financial officer, management assessed
the design and operating effectiveness of our internal control over financial reporting as of December 31, 2024, based on the
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management concluded that our internal control over financial reporting was
effective as of December 31, 2024.
The effectiveness of the company’s internal control over financial reporting as of December 31, 2024, has been audited
by KPMG LLP, an independent registered public accounting firm, as stated in their report, which is included herein.
Changes in Internal Control over Financial Reporting
Management is responsible for establishing and maintaining effective internal control over financial reporting to provide
reasonable assurance regarding the reliability of our financial reporting and the preparation of our consolidated financial
statements for external purposes in accordance with GAAP. We have not identified any changes in our internal control over
financial reporting that occurred during the quarter ended December 31, 2024, that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
47
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Green Plains Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Green Plains Inc. and subsidiaries' (the Company) internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated
statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the years in the three-year
period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements), and our report
dated February 7, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP
Omaha, Nebraska
February 7, 2025
48
Item 9B. Other Information.
During the year ended December 31, 2024, no director or officer of the company adopted, modified or terminated a
"Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of
Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Information in our Proxy Statement for the 2025 Annual Meeting of Stockholders (“Proxy Statement”) under “Corporate
Governance,” “Proposal 1 – Election of Directors,” “Executive Officers,” and under the subheading “Executive
Compensation—Compensation Disclosure and Analysis—Compensation Policies and Procedures—Insider Trading Policy”
is incorporated by reference.
We have adopted a code of ethics that applies to our chief executive officer, chief financial officer and all other senior
financial officers. Our code of ethics is available on our website at www.gpreinc.com in the “Investors and Media –
Governance” section. Amendments or waivers are disclosed within five business days following its adoption.
Item 11. Executive Compensation.
Information included in the Proxy Statement under “Corporate Governance - Compensation of Directors” and
“Executive Compensation” other than the “Pay vs. Performance Comparison” subheading is incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information in the Proxy Statement under “Security Ownership of Certain Beneficial Owners and Management” and
“Executive Compensation” other than the “Pay vs. Performance Comparison” subheading is incorporated by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information in the Proxy Statement under "Corporate Governance" and “Transactions with Related Persons, Promoters
and Certain Control Persons” is incorporated by reference.
Item 14. Principal Accounting Fees and Services.
Information in the Proxy Statement under “Independence of Auditors” and "Auditors' Fees" is incorporated by reference.
49
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(1) Financial Statements. The following consolidated financial statements and notes are filed as part of this annual
report on Form 10-K.
Page
Report of Independent Registered Public Accounting Firm
F-1
Auditor Name: KPMG LLP
Auditor Location: Omaha, NE
Auditor Firm ID: 185
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-3
Consolidated Statements of Operations for the years-ended December 31, 2024, 2023 and 2022
F-4
Consolidated Statements of Comprehensive Loss for the years-ended December 31, 2024, 2023 and 2022
F-5
Consolidated Statements of Stockholders’ Equity for the years-ended December 31, 2024, 2023 and 2022
F-6
Consolidated Statements of Cash Flows for the years-ended December 31, 2024, 2023 and 2022
F-7
Notes to Consolidated Financial Statements
F-9
(2) Financial Statement Schedules. All schedules have been omitted because they are not applicable or the required
information is included in the consolidated financial statements or notes thereto.
(3) Exhibits. The following exhibits are incorporated by reference, filed or furnished as part of this annual report on
Form 10-K.
Exhibit Index
Exhibit No.
Description of Exhibit
2.1(a)
Asset Purchase Agreement among Hereford Ethanol Partners, L.P. and Green Plains Hereford LLC, dated
December 11, 2020. (The schedules to the Asset Purchase Agreement have been omitted. The Company will
furnish such schedules to the SEC upon request.)
2.1(b)
Asset Purchase Agreement, dated December 14, 2020, by and among Green Plains LP, Green Plains
Holdings LLC, Green Plains Operating Company LLC, Green Plains Ethanol Storage LLC, Green Plains
Logistics LLC, Green Plains Inc., Green Plains Trade Group LLC and Green Plains Hereford LLC.
(incorporated herein by reference to Exhibit 2.2 to the company's Current Report on Form 8-K filed on
December 15, 2020).
2.2
Agreement and Plan of Merger, dated September 16, 2023, by and among Green Plains Inc., GPLP Holdings
Inc., GPLP Merger Sub LLC, Green Plains Holdings LLC and Green Plains Partners LP. (The schedules
have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.) (incorporated herein by reference to Exhibit 2.1 to the company's
Current Report on Form 8-K filed September 18, 2023).
3.1(a)
Second Amended and Restated Articles of Incorporation of the company (incorporated herein by reference to
Exhibit 3.1 of the company’s Current Report on Form 8-K filed October 15, 2008)
3.1(b)
Articles of Amendment to Second Amended and Restated Articles of Incorporation of Green Plains
Renewable Energy, Inc. (incorporated herein by reference to Exhibit 3.1 of the company’s Current Report on
Form 8-K filed May 9, 2011)
3.1(c)
Second Articles of Amendment to Second Amended and Restated Articles of Incorporation of Green Plains
Renewable Energy, Inc. (incorporated herein by reference to Exhibit 3.1 to the company’s Current Report on
Form 8-K filed May 16, 2014)
3.1(d)
Third Articles of Amendment to Second Amended and Restated Articles of Incorporation of Green Plains,
Inc. (incorporated herein by reference to Exhibit 3.1 to the company's Current Report on Form 8-K filed on
May 6, 2022)
50
3.2
Fifth Amended and Restated Bylaws of Green Plains Inc., dated November 14, 2022 (incorporated herein by
reference to Exhibit 3.1 to the company’s Current Report on Form 8-K filed on November 16, 2022)
4.1
Indenture relating to the 4.125% Convertible Senior Notes due 2022, dated as of August 15, 2016, between
Green Plains Inc. and Wilmington Trust, National Association, including the form of Global Note attached as
Exhibit A thereto (incorporated herein by reference to Exhibit 4.1 to the company’s Current Report on Form
8-K filed August 15, 2016)
4.2(a)
Indenture, dated March 1, 2021, between Green Plains Inc. and Wilmington Trust, National Association, as
trustee (incorporated herein by reference to Exhibit 4.1 to the company’s Current Report on Form 8-K dated
March 1, 2021)
4.2(b)
First Supplemental Indenture relating to the 2.25% Convertible Senior Notes due 2027, dated as of March 1,
2021, between Green Plains Inc. and Wilmington Trust, National Association, including the form of Global
Note attached as Exhibit A thereto (incorporated herein by reference to Exhibit 4.2 to the company’s Current
Report on Form 8-K dated March 1, 2021)
4.2(c)
Form of Global Note representing 2.25% Convertible Senior Notes due 2027 (included as a part of Exhibit
4.3(b)).
4.3
Indenture relating to the 4.00% Convertible Senior Notes due 2024, dated as of June 21, 2019, between
Green Plains Inc. and Wilmington Trust, National Association, including the form of Global Note attached as
Exhibit A thereto (incorporated herein by reference to Exhibit 4.1 of the company’s Current Report on Form
8-K filed on June 21, 2019)
4.4
Description of Securities Registered Under Section 12 of the Exchange Act (incorporated herein by reference
to Exhibit 4.7 of the company’s Annual Report on Form 10-K filed February 20, 2020)
4.5
Description of Securities Registered Under Section 12 of the Exchange Act (incorporated herein by reference
to Exhibit 4.1 of the company’s Quarterly Report on Form 10-Q filed on May 3, 2024)
10.1
Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.53 of the company’s
Registration Statement on Form S-4/A filed August 1, 2008)
*10.2(a)
Employment Agreement by and between Green Plains Renewable Energy, Inc. and Todd Becker dated May
7, 2008 (incorporated herein by reference to Exhibit 10.54 of the company’s Registration Statement on Form
S-4/A filed August 1, 2008)
*10.2(b)
Amendment No. 1 to Employment Agreement by and between Green Plains Renewable Energy, Inc. and
Todd Becker, dated December 18, 2009. (incorporated herein by reference to Exhibit 10.7(b) of the
company’s Annual Report on Form 10-K filed February 24, 2010)
*10.2(c)
Amendment No. 2 to Employment Agreement by and between Green Plains, Inc. and Todd Becker, dated
March 27, 2018 (incorporated herein by reference to Exhibit 10.52 of the company’s Quarterly Report on
Form 10-Q filed on May 7, 2018)
*10.3(a)
2019 Equity Incentive Plan (incorporated herein by reference to Appendix A of the company’s Definitive
Proxy Statement filed March 28, 2019)
*10.3(b)
Amendment No. 1 to the 2019 Equity Incentive Plan (incorporated herein by reference to Appendix A of the
company’s Definitive Proxy Statement filed March 26, 2020)
*10.3(c)
Green Plains Inc. Restricted Stock Agreement for 2019 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.5(c) to the company's Annual Report on Form 10-K filed on February 9, 2024)
*10.3(d)
Green Plains Inc. Performance Share Unit Agreement for 2019 Equity Incentive Plan (incorporated herein by
reference to Exhibit 10.5(d) to the company's Annual Report on Form 10-K filed on February 9, 2024)
*10.4
Umbrella Short-Term Incentive Plan (incorporated herein by reference to Appendix A of the company’s
Proxy Statement filed April 3, 2014)
*10.5
Employment Agreement by and between Green Plains Renewable Energy, Inc. and Patrich Simpkins dated
April 1, 2012 (incorporated herein by reference to Exhibit 10.2 of the company’s Quarterly Report on Form
10-Q filed May 1, 2014)
*10.6
Employment Agreement by and between Green Plains Inc. and Michelle S. Mapes dated February 3, 2020
(incorporated herein by reference to Exhibit 10.12 of the company’s Annual Report on Form 10-K filed
February 20, 2020)
10.7(a)
Revolving Credit Facility, dated as of April 30, 2018, by and among Green Plains Commodity Management
LLC and Macquarie Bank Limited (incorporated herein by reference to Exhibit 10.4 to the company’s
Quarterly Report on Form 10-Q dated May 7, 2018)
51
10.7(b)
Amendment to Revolving Credit Facility, dated as of June 18, 2019, by and among Green Plains Commodity
Management LLC and Macquarie Bank Limited (incorporated herein by reference to Exhibit 10.24(b) of the
company’s Annual Report on Form 10-K filed February 20, 2020)
10.7(c)
Second Amendment to Revolving Credit Facility, dated as of November 24, 2021, by and among Green
Plains Commodity Management LLC, Macquarie Bank Limited and Macquarie Futures USA LLC
(incorporated herein by reference to Exhibit 10.1 of the company’s Quarterly Report on Form 10-Q filed
May 4, 2023)
10.7(d)
Third Amendment to Revolving Credit Facility, dated as of February 20, 2022, by and among Green Plains
Commodity Management LLC, Macquarie Bank Limited and Macquarie Futures USA LLC (incorporated
herein by reference to Exhibit 10.2 of the company’s Quarterly Report on Form 10-Q filed May 4, 2023)
10.8(a)
Loan Agreement dated September 3, 2020 by and among Green Plains Wood River LLC and Green Plains
Shenandoah LLC, as the Borrowers, and MetLife Real Estate Lending LLC, as the Lender (incorporated
herein by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K filed on September 8,
2020)
10.8(b)
Delayed Draw Term Promissory Note dated September 3, 2020 by and among Green Plains Wood River
LLC and Green Plains Shenandoah LLC, as the Borrowers, and MetLife Real Estate Lending LLC, as the
Lender (incorporated herein by reference to Exhibit 10.2 to the company’s Current Report on Form 8-K filed
on September 8, 2020)
10.8(c)
Loan Guaranty Agreement dated September 3, 2020 by and among Green Plains Inc, as the Guarantor, and
MetLife Real Estate Lending LLC, as the Lender (incorporated herein by reference to Exhibit 10.3 to the
company’s Current Report on Form 8-K filed on September 8, 2020)
10.8(d)
Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated September 3,
2020 by and among Green Plains Wood River LLC, as the Trustor, and MetLife Real Estate Lending LLC,
as the Beneficiary (incorporated herein by reference to Exhibit 10.4 to the company’s Current Report on
Form 8-K filed on September 8, 2020)
10.8(e)
Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Filing dated September 3, 2020
by and among Green Plains Shenandoah LLC, as the Borrower, and MetLife Real Estate Lending LLC, as
the Lender (incorporated herein by reference to Exhibit 10.5 to the company’s Current Report on Form 8-K
filed on September 8, 2020)
10.8(f)
Modification to the Loan Agreement, dated May 24, 2024, by and among Green Plains Wood River LLC,
and Green Plains Shenandoah, LLC, as the Borrowers, and MetLife Real Estate Lending LLC, as the Lender
(incorporated herein by reference to Exhibit 10.1 of the company’s Quarterly Report on Form 10-Q filed
August 6, 2024)
10.9(a)
Note Purchase Agreement dated February 9, 2021 by and among Green Plains SPE LLC, as the Issuer, Green
Plains Inc., as Guarantor, and Purchasers signatory thereto. (The schedules to the Note Purchase Agreement
have been omitted. The Company will furnish such schedules to the SEC upon request.) (incorporated herein
by reference to Exhibit 10.1 to the company’s Current Report on Form 8-K filed on February 12, 2021)
10.9(b)
Pledge and Security Agreement dated February 9, 2021 by and among Green Plains SPE LLC, as the
Pledgor, in favor of Wilmington Trust, National Association, as Trustee. (The schedules to the Pledge and
Security Agreement have been omitted. The Company will furnish such schedules to the SEC upon request.)
(incorporated herein by reference to Exhibit 10.2 to the company’s Current Report on Form 8-K filed on
February 12, 2021)
10.9(c)
Indenture dated February 9, 2021 by Green Plains SPE LLC, as Issuer, Green Plains Inc., as Guarantor and
Wilmington Trust, National Association, as Trustee. (The schedules to the Indenture have been omitted. The
Company will furnish such schedules to the SEC upon request.) (incorporated herein by reference to Exhibit
10.3 to the company’s Current Report on Form 8-K filed on February 12, 2021)
10.9(d)
First Priority Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement from
Green Plains Mount Vernon LLC, as Mortgagor and Wilmington Trust, National Association, as Mortgagee.
(incorporated herein by reference to Exhibit 10.4 to the company’s Current Report on Form 8-K filed on
February 12, 2021)
10.9(e)
First Priority Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement
from Green Plains Obion LLC, as Mortgagor and Wilmington Trust, National Association, as Mortgagee.
(incorporated herein by reference to Exhibit 10.5 to the company’s Current Report on Form 8-K filed on
February 12, 2021)
52
10.10
Loan and Security Agreement, dated March 25, 2022, by and among Green Plains Inc., as Guarantor, Green
Plains Finance Company LLC, Green Plains Grain Company LLC and Green Plains Trade Group LLC as the
Borrowers, ING Capital LLC, as Agent and the other financial institutions party thereto. (The exhibits and
schedules to the Loan and Security Agreement have been omitted. The Company will furnish such schedules
to the SEC upon request). (incorporated herein by reference to Exhibit 10.1 to the company's Current Report
on Form 8-K filed on March 28, 2022).
10.11(a)
Exchange Agreement, dated August 3, 2022, by and between Green Plains Inc and the applicable
Noteholders (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on Form 8-K
filed on August 4, 2022)
10.11(b)
Exchange Agreement, dated August 4, 2022, by and between Green Plains Inc and the applicable
Noteholders (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on Form 8-K
filed on August 5, 2022)
10.11(c)
Exchange Agreement, dated August 4, 2022, by and between Green Plains Inc and the applicable
Noteholders (incorporated herein by reference to Exhibit 10.2 to the company's Current Report on Form 8-K
filed on August 5, 2022)
10.11(d)
Exchange Agreement, dated August 24, 2022, by and between Green Plains Inc and the applicable
Noteholders (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on Form 8-K
filed on August 25, 2022)
*10.12
Employment Agreement by and between Green Plains Inc. and James E. Stark, dated March 1, 2023
(incorporated herein by reference to Exhibit 10.4 to the company's Quarterly Report on Form 10-Q filed on
May 4, 2023).
*10.13
Green Plains Inc. Executive Change in Control Severance Plan, dated August 2, 2023 (incorporated herein
by reference to Exhibit 10.2 to the company's Quarterly Report on Form 10-Q filed on August 4, 2023)
*10.14
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and Todd
A. Becker, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.3 to the company's
Quarterly Report on Form 10-Q filed on August 4, 2023)
*10.15
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and
James E. Stark, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.3 to the company's
Quarterly Report on Form 10-Q filed on August 4, 2023)
*10.16
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and
Michelle Mapes, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.3 to the company's
Quarterly Report on Form 10-Q filed on August 4, 2023)
*10.17
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and Chris
Osowski, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.3 to the company's Quarterly
Report on Form 10-Q filed on August 4, 2023)
*10.18
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and
Patrich Simpkins, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.3 to the company's
Quarterly Report on Form 10-Q filed on August 4, 2023)
*10.19
Green Plains Inc. Director Compensation Program (incorporated herein by reference to Exhibit 10.31 to the
company's Annual Report on Form 10-K filed on February 9, 2024)
*10.20
Green Plains Partners LP 2015 Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.32
to the company's Annual Report on Form 10-K filed on February 9, 2024)
10.21
Support Agreement, dated September 16, 2023, by and among Green Plains Partners LP, Green Plains Inc.,
and the parties listed on the signature pages thereto (incorporated herein by reference to Exhibit 10.1 to the
company's Registration Statement on Form S-4/A filed on filed November 17, 2023)
10.22
Cooperation Agreement, dated February 6, 2024, by and among Green Plains Inc. and Ancora Holdings
Group, LLC (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on Form 8-K
filed on February 7, 2024)
*10.23
Employment Agreement by and between Green Plains Inc. and Grant Kadavy, dated October 3, 2022
(incorporated herein by reference to Exhibit 10.1 to the company's Quarterly Report on Form 10-Q filed on
May 3, 2024)
*10.24
Executive Change in Control Severance Plan Participation Letter by and between Green Plains Inc. and
Grant Kadavy, dated August 2, 2023 (incorporated herein by reference to Exhibit 10.2 to the company's
Quarterly Report on Form 10-Q filed on May 3, 2024)
53
*10.25
Amendment No. 1 to Employment Agreement by and between Green Plains Inc. and Phil Boggs effective
November 1, 2024 (incorporated herein by reference to Exhibit 10.1 to the company's Current Report on
Form 8-K/A filed on November 15, 2024)
*10.26
Executive Change in Control Severance Plan Participation Letter - Amended and Restated by and between
Green Plains Inc. and Phil Boggs dated November 4, 2024 (incorporated herein by reference to Exhibit 10.2
to the company's Current Report on Form 8-K/A filed on November 15, 2024)
*10.27
Confidential Severance Agreement and Release by and between Green Plains Inc. and Jim Stark dated
November 15, 2024 (incorporated herein by reference to Exhibit 10.3 to the company's Current Report on
Form 8-K/A filed on November 15, 2024)
*10.28
Amendment No. 3 to Employment Agreement by and between Green Plains Inc. and Todd Becker dated
December 1, 2024
*10.29
Amendment No. 1 to Employment Agreement by and between Green Plains Inc. and Grant Kadavy dated
February 6, 2025
*10.30
Confidential Severance Agreement and Release by and between Green Plains Inc. and Grant Kadavy dated
February 6, 2025
19.1
Green Plains Inc. Insider Trading Policy
21.1
Schedule of Subsidiaries
23.1
Consent of KPMG LLP
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley
Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Section 302 of the Sarbanes-Oxley
Act of 2002
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
97
Green Plains Inc. Clawback Policy (incorporated herein by reference to Exhibit 97 to the company's Annual
Report on Form 10-K filed on February 9, 2024)
101
The following information from Green Plains Inc.’s Annual Report on Form 10-K for the annual period
ended December 31, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the
Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated
Statements of Comprehensive Loss (iv) the Consolidated Statements of Stockholders’ Equity (v) the
Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements and
Financial Statement Schedule.
104
The cover page from Green Plains Inc. Annual Report on Form 10-K for the year ended December 31, 2024,
formatted in iXBRL
__________________
* Represents management compensatory contracts
Item 16. Form 10-K Summary.
None.
54
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GREEN PLAINS INC
(Registrant)
Date: February 7, 2025
By: /s/ Todd A. Becker
Todd A. Becker
President and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Todd A. Becker
President and Chief Executive Officer
February 7, 2025
Todd A. Becker
(Principal Executive Officer) and Director
/s/ Philip B. Boggs
Chief Financial Officer (Principal Financial
February 7, 2025
Philip B. Boggs
Officer and Principal Accounting Officer)
/s/ Jim Anderson
Chairman of the Board
February 7, 2025
Jim Anderson
/s/ Farha Aslam
Director
February 7, 2025
Farha Aslam
/s/ Ejnar A. Knudsen III
Director
February 7, 2025
Ejnar A. Knudsen III
/s/ Brian D. Peterson
Director
February 7, 2025
Brian D. Peterson
/s/ Martin Salinas Jr.
Director
February 7, 2025
Martin Salinas Jr.
/s/ Alain Treuer
Director
February 7, 2025
Alain Treuer
/s/ Kimberly Wagner
Director
February 7, 2025
Kimberly Wagner
55
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Green Plains Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Green Plains Inc. and subsidiaries (the Company) as of
December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders’ equity,
and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the
consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows
for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted
accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 7, 2025 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective,
or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Fair value of forward contracts
As discussed in Note 2 to the consolidated financial statements, the Company records forward contracts at fair value
unless the contract qualifies for and the Company elects normal purchase or sale exceptions. The Company estimates a
fair value 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. As of December 31, 2024, the recorded
balances of the Company’s derivative assets and liabilities associated with forward contracts were $10.2 million and $4.8
million, respectively, and are classified as Level 2 assets and liabilities within Notes 5 and 10.
We identified the assessment of the valuation of forward contracts as a critical audit matter. Specifically, evaluating the
valuation of forward contracts, which included assumptions related to exchange-quoted prices, and adjustments for
regional location basis values, involved complex auditor judgment due to the subjectivity involved in determining the
fair value.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of certain internal controls related to the valuation of forward contracts. To assess the
valuation of forward contracts, for a sample of contracts, we tested the Company’s exchange-quoted prices by comparing
F-1
the amounts used to observable market transactions and evaluated the Company’s adjustments for regional location basis
values by comparing inputs used by the Company to third-party information, including broker quotations or other market
transactions.
/s/ KPMG LLP
We have served as the Company’s auditor since 2009.
Omaha, Nebraska
February 7, 2025
F-2
GREEN PLAINS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31,
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
173,041 $
349,574
Restricted cash
36,354
29,188
Accounts receivable, net of allowances of $80 and $85, respectively
94,901
94,446
Inventories
227,444
215,810
Prepaid expenses and other
27,138
23,940
Derivative financial instruments
10,154
19,772
Total current assets
569,032
732,730
Property and equipment, net
1,042,460
1,021,928
Operating lease right-of-use assets
72,161
73,993
Other assets
98,521
110,671
Total assets
$
1,782,174 $
1,939,322
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
$
154,817 $
186,643
Accrued and other liabilities
53,712
57,029
Derivative financial instruments
9,500
10,577
Operating lease current liabilities
24,711
22,908
Short-term notes payable and other borrowings
140,829
105,973
Current maturities of long-term debt
2,118
1,832
Total current liabilities
385,687
384,962
Long-term debt
432,460
491,918
Operating lease long-term liabilities
49,190
53,879
Other liabilities
40,300
18,507
Total liabilities
907,637
949,266
Commitments and contingencies (Note 16)
Stockholders' equity
Common stock, $0.001 par value; 150,000,000 shares authorized; 67,512,282 and 62,326,622
shares issued, and 64,707,223 and 59,521,563 shares outstanding, respectively
68
62
Additional paid-in capital
1,213,646
1,113,806
Retained deficit
(318,298)
(235,801)
Accumulated other comprehensive income (loss)
973
(3,160)
Treasury stock, 2,805,059 shares
(31,174)
(31,174)
Total Green Plains stockholders' equity
865,215
843,733
Noncontrolling interests
9,322
146,323
Total stockholders' equity
874,537
990,056
Total liabilities and stockholders' equity
$
1,782,174 $
1,939,322
See accompanying notes to the consolidated financial statements.
F-3
GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Year Ended December 31,
2024
2023
2022
Revenues
$
2,458,796 $
3,295,743 $
3,662,849
Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected
below)
2,328,346
3,130,992
3,550,169
Selling, general and administrative expenses
118,045
133,350
118,930
Gain on sale of assets
(30,723)
(5,265)
—
Depreciation and amortization expenses
90,587
98,244
92,698
Total costs and expenses
2,506,255
3,357,321
3,761,797
Operating loss
(47,459)
(61,578)
(98,948)
Other income (expense)
Interest income
7,560
11,707
5,277
Interest expense
(33,095)
(37,703)
(32,642)
Other, net
1,696
5,225
27,612
Total other income (expense)
(23,839)
(20,771)
247
Loss before income taxes and income (loss) from equity method investees
(71,298)
(82,349)
(98,701)
Income tax benefit (expense)
(6,212)
5,617
(4,747)
Income (loss) from equity method investees, net of income taxes
(3,679)
433
71
Net loss
(81,189)
(76,299)
(103,377)
Net income attributable to noncontrolling interests
1,308
17,085
23,841
Net loss attributable to Green Plains
$
(82,497) $
(93,384) $
(127,218)
Earnings per share
Net income (loss) attributable to Green Plains - basic and diluted
$
(1.29) $
(1.59) $
(2.29)
Weighted average shares outstanding
Basic and diluted
63,796
58,814
55,541
See accompanying notes to the consolidated financial statements.
F-4
GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Year Ended December 31,
2024
2023
2022
Net loss
$
(81,189) $
(76,299) $
(103,377)
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on derivatives arising during the period, net of
tax benefit (expense) of $1,919, ($2,021) and $5,092, respectively
(6,082)
6,348
(16,109)
Reclassification of realized losses on derivatives, net of tax benefit of
($3,223), ($5,438) and ($578), respectively
10,215
17,083
1,828
Total other comprehensive income (loss), net of tax
4,133
23,431
(14,281)
Comprehensive loss
(77,056)
(52,868)
(117,658)
Comprehensive income attributable to noncontrolling interests
1,308
17,085
23,841
Comprehensive loss attributable to Green Plains
$
(78,364) $
(69,953) $
(141,499)
See accompanying notes to the consolidated financial statements.
F-5
GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
Common
Stock
Additional
Paid-in
Capital
Retained
(Deficit)
Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock
Total
Green Plains
Stockholders'
Equity
Non-
Controlling
Interests
Total
Stockholders'
Equity
Shares
Amount
Shares
Amount
Balance, January 1, 2022
61,840 $
62 $ 1,069,573 $
(15,199) $
(12,310)
8,244 $ (91,626) $
950,500 $
151,519 $
1,102,019
Net income (loss)
—
—
—
(127,218)
—
—
—
(127,218)
23,841
(103,377)
Cash dividends and
distributions declared
—
—
—
—
—
—
—
—
(25,240)
(25,240)
Other comprehensive loss
before reclassification
—
—
—
—
(16,109)
—
—
(16,109)
—
(16,109)
Amounts reclassified from
accumulated other
comprehensive loss
—
—
—
—
1,828
—
—
1,828
—
1,828
Other comprehensive loss, net
of tax
—
—
—
—
(14,281)
—
—
(14,281)
—
(14,281)
Exchange of 4.125%
convertible notes due 2022
—
—
19,756
—
—
(1,188)
13,211
32,967
—
32,967
Redemption of 4.00%
convertible notes due 2024
—
—
15,797
(4,251)
47,241
63,038
—
63,038
Investment in subsidiaries
—
—
—
—
—
—
—
—
675
675
Stock-based compensation
261
—
5,025
—
—
—
—
5,025
240
5,265
Balance, December 31, 2022
62,101
62 1,110,151
(142,417)
(26,591)
2,805
(31,174)
910,031
151,035
1,061,066
Net income (loss)
—
—
—
(93,384)
—
—
—
(93,384)
17,085
(76,299)
Cash dividends and
distributions declared
—
—
—
—
—
—
—
—
(22,728)
(22,728)
Other comprehensive income
before reclassification
—
—
—
—
6,348
—
—
6,348
—
6,348
Amounts reclassified from
accumulated other
comprehensive loss
—
—
—
—
17,083
—
—
17,083
—
17,083
Other comprehensive income,
net of tax
—
—
—
—
23,431
—
—
23,431
—
23,431
Investment in subsidiaries
—
—
—
—
—
—
—
—
572
572
Stock-based compensation
226
—
3,655
—
—
—
—
3,655
359
4,014
Balance, December 31, 2023
62,327
62 1,113,806
(235,801)
(3,160)
2,805
(31,174)
843,733
146,323
990,056
Net income (loss)
—
—
—
(82,497)
—
—
—
(82,497)
1,308
(81,189)
Distributions declared
—
—
—
—
—
—
—
—
(5,165)
(5,165)
Other comprehensive loss
before reclassification
—
—
—
—
(6,082)
—
—
(6,082)
—
(6,082)
Amounts reclassified from
accumulated other
comprehensive loss
—
—
—
—
10,215
—
—
10,215
—
10,215
Other comprehensive income,
net of tax
—
—
—
—
4,133
—
—
4,133
—
4,133
Partnership Merger
4,746
5
97,035
—
—
—
—
97,040
(133,765)
(36,725)
Investment in subsidiaries
—
—
(769)
—
—
—
—
(769)
621
(148)
Stock-based compensation
439
1
3,574
—
—
—
—
3,575
—
3,575
Balance, December 31, 2024
67,512 $
68 $ 1,213,646 $ (318,298) $
973
2,805 $ (31,174) $
865,215 $
9,322 $
874,537
See accompanying notes to the consolidated financial statements.
F-6
GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2024
2023
2022
Cash flows from operating activities
Net loss
$
(81,189) $
(76,299) $
(103,377)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization
90,587
98,244
92,698
Amortization of debt issuance costs and non-cash interest expense
2,277
2,693
3,894
Gain on the sale of assets
(30,723)
(5,265)
—
Inventory lower of cost or net realizable value adjustment
2,143
2,627
12,323
Loss on extinguishment of debt
1,763
—
419
Deferred income taxes
3,944
(6,855)
4,515
Stock-based compensation
8,274
13,032
9,071
Loss (income) from equity method investees, net of income taxes
3,679
(433)
(71)
Distribution from equity method investees
575
—
637
Other
165
2,203
(786)
Changes in operating assets and liabilities before effects of asset dispositions
Accounts receivable
(455)
14,164
8,519
Inventories
(12,745)
53,472
(23,435)
Derivative financial instruments
13,980
(2,919)
(7,145)
Prepaid expenses and other assets
(5,165)
(3,704)
(3,354)
Accounts payable and accrued liabilities
(27,907)
(34,573)
75,311
Current income taxes
(285)
497
841
Other
1,117
(538)
(351)
Net cash provided by (used in) operating activities
(29,965)
56,346
69,709
Cash flows from investing activities
Purchases of property and equipment, net
(95,084)
(108,093)
(212,366)
Proceeds from the sale of marketable securities
—
—
124,523
Proceeds from the sale of assets, net
48,704
25,403
—
Investment in equity method investees
(15,672)
(24,206)
(17,156)
Other investing activities
—
—
(253)
Net cash used in investing activities
(62,052)
(106,896)
(105,252)
Cash flows from financing activities
Proceeds from the issuance of long-term debt
—
—
45,000
Payments of principal on long-term debt
(61,697)
(4,838)
(1,751)
Proceeds from short-term borrowings
758,095
1,190,999
1,863,315
Payments on short-term borrowings
(724,133)
(1,223,785)
(1,898,414)
Payments on extinguishment of convertible debt
—
—
(1,766)
Payments on extinguishment of non-controlling interest
(29,196)
—
—
Payments of dividends and distributions
(5,165)
(22,728)
(22,555)
Payments of transaction costs
(5,951)
—
—
Payments of loan fees
(1,544)
(16)
(2,522)
Payments related to tax withholdings for stock-based compensation
(4,699)
(9,018)
(3,806)
Other financing activities
(3,060)
(1,578)
(2,641)
Net cash used in financing activities
(77,350)
(70,964)
(25,140)
Net change in cash and cash equivalents, and restricted cash
(169,367)
(121,514)
(60,683)
Cash and cash equivalents, and restricted cash, beginning of period
378,762
500,276
560,959
Cash and cash equivalents, and restricted cash, end of period
$
209,395
$
378,762
$
500,276
Continued on the following page
F-7
GREEN PLAINS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Continued from the previous page
Year Ended December 31,
2024
2023
2022
Reconciliation of total cash and cash equivalents, and restricted cash
Cash and cash equivalents
$
173,041 $
349,574 $
444,661
Restricted cash
36,354
29,188
55,615
Total cash and cash equivalents, and restricted cash
$
209,395 $
378,762 $
500,276
Non-cash financing activity
Issuance of common stock as a result of the Merger
$
5 $
— $
—
Extinguishment of non-controlling interest within additional paid-in
capital
$
133,765 $
— $
—
Exchange of 4.00% convertible notes due 2024 for shares of common
stock held in treasury stock
$
— $
— $
64,000
Exchange of 4.125% convertible notes due 2022 for shares of common
stock held in treasury stock
$
— $
— $
32,550
Supplemental investing activities
Assets disposed of in sale
$
21,027 $
22,351 $
—
Less: liabilities relinquished
(3,295)
(3,779)
—
Net assets disposed
$
17,732 $
18,572 $
—
Supplemental disclosures of cash flow
Cash paid for income taxes, net
$
486 $
1,242 $
583
Cash paid for interest
$
31,314 $
35,161 $
30,889
Capital expenditures in accounts payable
$
5,502 $
7,001 $
17,140
Capital expenditures in other liabilities
$
17,918 $
— $
—
Non-cash asset retirement obligation additions
$
1,492 $
3,013 $
2,018
See accompanying notes to the consolidated financial statements.
F-8
GREEN PLAINS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS
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 4
– Merger and Dispositions included herein for more information.
The company also owns a majority interest in FQT, with their results being consolidated in our consolidated financial
statements.
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.
•
Ethanol Production. Our ethanol production segment includes the production, storage and transportation of ethanol,
distillers grains, Ultra-High Protein and renewable corn oil at ten biorefineries in Illinois, Indiana, Iowa, Minnesota,
Nebraska and Tennessee. At capacity, our facilities are capable of processing approximately 310 million bushels of
corn per year and producing approximately 903 million gallons of ethanol, 2.2 million tons of distillers grains and
Ultra-High Protein, and 310 million pounds of renewable corn oil, a low-carbon feedstock for biodiesel and
renewable diesel. We are one of the largest ethanol producers in North America.
•
Agribusiness and Energy Services. Our agribusiness and energy services segment includes grain procurement, with
approximately 20.2 million bushels of grain storage capacity, and our commodity marketing business, which
markets, sells and distributes the ethanol, distillers grains and renewable corn oil produced at our ethanol plants. We
also market ethanol for a third-party producer as well as buy and sell ethanol, distillers grains, renewable corn oil,
grain, natural gas and other commodities in various markets.
F-9
As a result of the Merger, the partnership's operations are included in the ethanol production operating segment.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents include 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.
F-10
The company uses exchange-traded futures and options contracts and forward purchase and sale contracts to attempt to
minimize the effect of price changes on ethanol, renewable corn oil, grain and natural gas. Exchange-traded futures and
options contracts are valued at quoted market prices and settled predominantly in cash. The company is exposed to loss when
counterparties default on forward purchase and sale contracts. Grain inventories held for sale and forward purchase and sale
contracts are valued at market prices when available or other market quotes adjusted for basis differences, primarily in
transportation, between the exchange-traded market and local market where the terms of the contract are 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.
Concentrations of Credit Risk
The company is exposed to credit risk resulting from the possibility that another party may fail to perform according to
the terms of the company’s contract. The company sells ethanol, distillers grains, Ultra-High Protein and renewable corn oil
and markets products for third parties, which can result in concentrations of credit risk from a variety of customers, including
major integrated oil companies, large independent refiners, petroleum wholesalers and other marketers. The company also
sells grain to large commercial buyers. Although payments are typically received within fifteen days of the sale, the company
continually monitors its exposure. The company is also exposed to credit risk on prepayments of undelivered inventories with
a few major suppliers of petroleum products and agricultural inputs.
The company has master netting arrangements with various counterparties for the purchase and sale of natural gas. On
the consolidated balance sheets, the associated net amount for each counterparty is reflected as either an accounts receivable
F-11
or accounts payable. If the amount for each counterparty were reflected on a gross basis, the company's accounts receivable
and accounts payable would increase by $0.5 million and $1.2 million at December 31, 2024 and 2023, respectively.
Inventories
Corn held for ethanol production, ethanol, distillers grain, Ultra-High Protein, and renewable corn oil inventories are
recorded at the lower of average cost or net realizable value, except fair-value hedged inventories.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is generally calculated using the
straight-line method over the following estimated useful life of the assets:
Years
Buildings and improvements
10-40
Plant equipment
15-40
Other machinery and equipment
5-7
Land improvements
15-40
Railroad track and equipment
20-30
Computer hardware and software
3-5
Office furniture and equipment
5-7
Property and equipment is capitalized at cost. Land improvements, interest incurred during construction and other
property improvements are capitalized and depreciated. Betterment of property assets are those that extend the useful life,
increase the capacity or improve the operating efficiency or improve the safety of our operations. Costs of repairs and normal
maintenance are charged to expense when incurred. The company periodically evaluates whether events and circumstances
have occurred that warrant a revision of the estimated useful life of its fixed assets.
Intangible Assets
Our intangible assets consist primarily of customer relationships, intellectual property, and licenses. These intangible
assets were capitalized at fair market value and are being amortized over their estimated useful lives.
Impairment of Long-Lived Assets
The company reviews its long-lived assets, currently consisting of property and equipment, operating lease right-of-use
assets, intangible assets and equity method investments, for impairment whenever events or changes in circumstances
indicate the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is measured by
comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the
amount by which the carrying amount of the asset exceeds the fair value of the asset. Significant management judgment is
required to determine the fair value of our long-lived assets and measure impairment, which includes projected cash flows.
Fair value is determined by using various valuation techniques, including discounted cash flow models, sales of comparable
properties and third-party independent appraisals. Changes in estimated fair value could result in an impairment of the asset.
There were no material impairment charges recorded for the periods reported.
Goodwill
Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business
combination that are not individually identified and separately recognized. The determination of goodwill takes into
consideration the fair value of net tangible and intangible assets. The company’s goodwill is related to an acquisition within
our ethanol production segment.
The company is required to perform impairment tests related to goodwill annually, which it performs as of October 1, or
if an indicator of impairment occurs. Circumstances that may indicate impairment include a decline in the company’s future
projected cash flows, a decision to suspend plant operations for an extended period of time, sustained decline in the
F-12
company’s market capitalization or market prices for similar assets or businesses, or a significant adverse change in legal or
regulatory matters or business climate. Significant management judgment is required to determine the fair value of goodwill
and measure impairment, which include, but are not limited to, market capitalization, prospective financial information,
growth rates, discount rates, inflationary factors, and cost of capital. Fair value is determined by using various valuation
techniques, including discounted cash flow models, sales of comparable properties and third-party independent appraisals.
Changes in estimated fair value could result in a write-down of the asset.
Leases
The company leases certain facilities, parcels of land, and equipment. These leases are accounted for as operating leases,
with lease expense recognized on a straight-line basis over the lease term. The term of the lease may include options to
extend or terminate the lease when it is reasonably certain that such options will be exercised. For leases with initial terms
greater than 12 months, the company records operating lease right-of-use assets and corresponding operating lease liabilities.
Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The company did not
incur any material short-term lease expense for the years ended December 31, 2024, 2023 or 2022.
Operating lease right-of-use assets represent the right to control an underlying asset for the lease term and operating lease
liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized at
the commencement date based on the present value of lease payments over the lease term. As the company’s leases do not
provide an implicit rate, the incremental borrowing rate is used based on information available at commencement date to
determine the present value of future payments.
The company elected to utilize a portfolio approach for lease classification, which allows for an entity to group together
leases with similar characteristics provided that its application does not create a material difference when compared to
accounting for the leases at a contract level. For railcar leases, the company elected to combine the railcars within each rider
and account for each rider as an individual lease.
From a lessee perspective, the company combines both the lease and non-lease components and accounts for them as one
lease. Certain of the company’s railcar agreements provide for maintenance costs to be the responsibility of the company as
incurred or charged by the lessor. This maintenance cost is a non-lease component that the company combines with the
monthly rental payment and accounts for the total cost as operating lease expense. In addition, the company has a land lease
that contains a non-lease component for the handling and unloading services the landlord provides. The company combines
the cost of services with the land lease cost and accounts for the total as operating lease expense.
Investments in Equity Method Investees
The company accounts for investments in which the company exercises significant influence using the equity method so
long as the company (i) does not control the investee and (ii) is not the primary beneficiary of the entity. The company
recognizes these investments as a separate line item in the consolidated balance sheets and its proportionate share of earnings
on a separate line item in the consolidated statements of operations.
The company recognizes losses in the value of equity method investments when there is evidence of an other-than-
temporary decrease in value. Evidence of a loss might include, but would not necessarily be limited to, the inability to
recover the carrying amount of the investment or the inability of the equity method investee to sustain an earnings capacity
that justifies the carrying amount of the investment. The current fair value of an investment that is less than its carrying
amount may indicate a loss in value of the investment. The company evaluates equity method investments for impairment if
there is evidence an investment may be impaired. Distributions paid to the company from unconsolidated affiliates are
classified as operating activities in the consolidated statements of cash flows until the cumulative distributions exceed the
company’s proportionate share of income from the unconsolidated affiliate since the date of initial investment. The amount of
cumulative distributions paid to the company that exceeds the cumulative proportionate share of income in each period
represents a return of investment, which is classified as an investing activity in the consolidated statements of cash flows.
Our equity method investments, which consist primarily of our 50% investment in GP Turnkey Tharaldson LLC, totaled
$51.6 million and $41.7 million as of December 31, 2024 and 2023, respectively, and are reflected in other assets on the
consolidated balance sheet. Interest capitalized related to our equity method investments during the years ended
December 31, 2024 and 2023 totaled $0.8 million and $1.4 million, respectively.
F-13
Financing Costs
Fees and costs related to securing debt are recorded as financing costs. Debt issuance costs are stated at cost and are
amortized using the effective interest method for term loans and the straight-line basis over the life of the agreements for
revolving credit arrangements and convertible notes.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist of various expenses including employee salaries, incentives and
benefits; office expenses; director compensation; professional fees for accounting, legal, consulting, and investor relations
activities.
Stock-Based Compensation
The company recognizes compensation cost using a fair value based method whereby compensation cost is measured at
the grant date based on the market price of the award on the date of the award agreement, or an estimated fair value for
market-based awards, and is recognized over the service period on a straight-line basis, which is usually the vesting period.
Income Taxes
The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and
liabilities are recognized for the expected future tax consequences attributable to temporary differences between the financial
reporting carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
operating results in the period of enactment. Deferred tax assets are reduced by a valuation allowance when it is more likely
than not that some portion or all of the deferred tax assets will not be realized.
The company recognizes uncertainties in income taxes within the financial statements under a process by which the
likelihood of a tax position is gauged based upon the technical merits of the position, and then a subsequent measurement
relates the maximum benefit and the degree of likelihood to determine the amount of benefit recognized in the financial
statements.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures (Subtopic 220-40), which provides clarity in assessing an entity's performance and prospects for
future cash flows by disclosure of more detailed information about the types of expenses in commonly presented expense
captions. ASU 2024-03 is effective for the company's fiscal year-ended December 31, 2027. Early adoption is permitted. The
company is currently evaluating the impact of this ASU.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax
Disclosures to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for the
company's fiscal year-ended December 31, 2025. The ASU indicates that all entities will apply its guidance prospectively
with an option for retroactive application to each period in the financial statements. The company is currently evaluating the
impact of this ASU.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable
Segment Disclosures, which improves reportable segment disclosure requirements through enhanced disclosures about
significant segment expenses. The company adopted the amended guidance for the fiscal year-ended December 31, 2024.
Refer to Note 6 – Segment Information included in the notes to the audited consolidated financial statements included herein
for more information about our segment reporting.
3. REVENUE
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract with a customer are satisfied. Generally this occurs
F-14
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.
Revenue by Source
The following tables disaggregate revenue by major source (in thousands):
Twelve Months Ended December 31, 2024
Ethanol
Production
Agribusiness &
Energy Services
Eliminations
Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol
$
—
$
—
$
—
$
—
Distillers grains
88,660
10,015
—
98,675
Renewable corn oil
—
—
—
—
Other
55,613
8,685
—
64,298
Intersegment revenues
3,707
287
(3,994)
—
Total revenues from contracts with customers
147,980
18,987
(3,994)
162,973
Revenues from contracts accounted for as derivatives under ASC 815
(1)
Ethanol
1,522,215
329,768
—
1,851,983
Distillers grains
252,694
28,630
—
281,324
Renewable corn oil
136,671
3,346
—
140,017
Other
7,529
14,970
—
22,499
Intersegment revenues
—
25,406
(25,406)
—
Total revenues from contracts accounted for as derivatives
1,919,109
402,120
(25,406)
2,295,823
Total Revenues
$
2,067,089
$
421,107
$
(29,400) $
2,458,796
Twelve Months Ended December 31, 2023
Ethanol
Production
Agribusiness &
Energy Services
Eliminations
Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol
$
—
$
—
$
—
$
—
Distillers grains
85,474
—
—
85,474
Renewable corn oil
—
—
—
—
Other
35,222
15,593
—
50,815
Intersegment revenues
4,555
239
(4,794)
—
Total revenues from contracts with customers
125,251
15,832
(4,794)
136,289
Revenues from contracts accounted for as derivatives under ASC 815
(1)
Ethanol
2,117,296
388,764
—
2,506,060
Distillers grains
377,357
34,818
—
412,175
Renewable corn oil
179,424
8,048
—
187,472
Other
25,213
28,534
—
53,747
Intersegment revenues
—
24,907
(24,907)
—
Total revenues from contracts accounted for as derivatives
2,699,290
485,071
(24,907)
3,159,454
Total Revenues
$
2,824,541
$
500,903
$
(29,701) $
3,295,743
F-15
Twelve Months Ended December 31, 2022
Ethanol
Production
Agribusiness &
Energy Services
Eliminations
Total
Revenues
Revenues from contracts with customers under ASC 606
Ethanol
$
—
$
—
$
—
$
—
Distillers grains
28,634
—
—
28,634
Renewable corn oil
—
—
—
—
Other
42,135
7,787
—
49,922
Intersegment revenues
4,445
229
(4,674)
—
Total revenues from contracts with customers
75,214
8,016
(4,674)
78,556
Revenues from contracts accounted for as derivatives under ASC 815
(1)
Ethanol
2,286,886
481,392
—
2,768,278
Distillers grains
493,605
45,766
—
539,371
Renewable corn oil
195,114
3,954
—
199,068
Other
27,821
49,755
—
77,576
Intersegment revenues
—
26,732
(26,732)
—
Total revenues from contracts accounted for as derivatives
3,003,426
607,599
(26,732)
3,584,293
Total Revenues
$
3,078,640
$
615,615
$
(31,406) $
3,662,849
(1)
Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC 606.
Major Customer
Revenues from Customer A represented 13% of total revenues for the year ended December 31, 2024, which are
recorded within the ethanol production segment. Revenues from Customer A and Customer B represented 15% and 10% of
total revenues for the year ended December 31, 2023, respectively, which are recorded within the ethanol production
segment. Customer A represented 13% of total revenues for the year ended December 31, 2022, which are recorded within
the ethanol production segment.
Payment Terms
The company has standard payment terms, which vary depending upon the nature of the services provided, with the
majority falling within 10 to 30 days after transfer of control or completion of services. In instances where the timing of
revenue recognition differs from the timing of invoicing, the company has determined that contracts generally do not include
a significant financing component.
Contract Liabilities
The company records unearned revenue when consideration is received, or such consideration is unconditionally due,
from a customer prior to transferring goods or services to the customer under the terms of service agreements. Unearned
revenue from service agreements, which represents a contract liability, is recorded for fees that have been charged to the
customer prior to the completion of performance obligations. Unearned revenue is generally recognized in the subsequent
period and is not material to the company. The company expects to recognize all of the unearned revenue associated with
service agreements as of December 31, 2024 when the services are provided.
4. MERGER AND DISPOSITIONS
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.
F-16
The interests in the partnership owned by the company and its subsidiaries remained outstanding as limited partner
interests in the surviving entity until the partnership was dissolved in the fourth quarter of 2024.
Since the company controlled the partnership prior to the Merger and continued 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
year ended December 31, 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. In 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 year ended December 31, 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.
Disposition of Birmingham Terminal
On September 30, 2024, the company completed the sale of the terminal located in Birmingham, Alabama and certain
related assets and transfer of liabilities (the "Birmingham Transaction") for a sale price of $47.5 million, plus working capital
of $1.2 million. The company recorded a pretax gain on the sale of $30.7 million. The proceeds from the sale were used to
repay the outstanding balance of the Green Plains Partners term loan due July 20, 2026.
The assets sold and liabilities transferred of the Birmingham Transaction at closing on September 30, 2024 were as
follows (in thousands):
Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Prepaid expenses and other
1,209
Property and equipment
7,012
Operating lease right-of-use assets
2,208
Goodwill
10,598
Operating lease current liabilities
(427)
Operating lease long-term liabilities
(2,312)
Other liabilities
(556)
Total identifiable net assets disposed
$
17,732
Disposition of the Atkinson Ethanol Plant
On September 7, 2023, the company completed the sale of the plant located in Atkinson, Nebraska and certain related
assets and transfer of liabilities ("the Atkinson Transaction") for a sale price of $22.9 million, plus working capital of $1.1
million. Correspondingly, the company entered into a separate asset purchase agreement with the partnership for $2.1 million
to acquire the storage assets and the associated railcar operating leases. The divested assets were reported within the
company’s ethanol production, agribusiness and energy services and partnership segments. The company recorded a pretax
gain on the sale of the Atkinson plant of $4.1 million recorded within corporate activities.
F-17
The assets sold and liabilities transferred of the Atkinson plant at closing on September 7, 2023 were as follows: (in
thousands):
Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Inventories
$
3,164
Prepaid expenses and other
423
Property, plant and equipment
15,199
Operating lease right-of-use assets
3,428
Accrued and other liabilities
(162)
Operating lease current liabilities
(1,332)
Operating lease long-term liabilities
(2,096)
Other liabilities
(189)
Total identifiable net assets disposed
$
18,435
5. 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. Fair value hedged inventories 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.
F-18
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 December 31, 2024
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Total
Assets
Cash and cash equivalents
$
173,041 $
— $
173,041
Restricted cash
36,354
—
36,354
Inventories carried at market
—
48,500
48,500
Derivative financial instruments - assets
—
10,154
10,154
Total assets measured at fair value
$
209,395 $
58,654 $
268,049
Liabilities
Accounts payable (1)
$
— $
23,208 $
23,208
Accrued and other liabilities (2)
—
2,094
2,094
Derivative financial instruments - liabilities
—
4,791
4,791
Other liabilities (2)
—
979
979
Total liabilities measured at fair value
$
— $
31,072 $
31,072
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 $23.2 million and $54.7 million at December 31, 2024 and 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 December 31, 2024 and 2023, respectively, accrued and other liabilities includes $2.1 million and $9.9 million and other liabilities includes
$1.0 million and $0.7 million of consideration related to potential earn-out payments recorded at fair value.
F-19
The fair value of the company’s debt was approximately $518.6 million compared with a book value of $575.4 million at
December 31, 2024. The fair value of the company’s debt was approximately $585.0 million compared with a book value of
$599.7 million at December 31, 2023. 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 $94.9 million and $94.4
million, respectively, at December 31, 2024 and 2023.
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.
6. 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, 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 remaining terminal 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, as well as gain on sale of assets.
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 Chief Operating Decision Maker ("CODM") for the company is the Chief Executive Officer. The CODM utilizes
EBITDA to assess segment performance, which is derived from revenue less cost of goods sold and selling, general and
administrative expenses. The CODM manages and allocates resources to the operations of the Company's two segments. This
enables the CEO to assess the Company’s overall level of available resources and determine how best to deploy these
resources for capital expenditure, research and development projects, and other strategic opportunities that are in line with
our long-term strategic goals. The CODM is regularly provided with consolidated expense information or forecasted expense
information for the applicable reportable segment.
F-20
The following tables set forth certain financial data for the company’s operating segments (in thousands):
Year Ended December 31,
2024
2023
2022
Revenues
Ethanol production
Revenues from external customers
$
2,063,382 $
2,819,986 $
3,074,195
Intersegment revenues
3,707
4,555
4,445
Total segment revenues
2,067,089
2,824,541
3,078,640
Agribusiness and energy services
Revenues from external customers
395,414
475,757
588,654
Intersegment revenues
25,693
25,146
26,961
Total segment revenues
421,107
500,903
615,615
Revenues including intersegment activity
2,488,196
3,325,444
3,694,255
Intersegment eliminations
(29,400)
(29,701)
(31,406)
$
2,458,796 $
3,295,743 $
3,662,849
Refer to Note 3 – Revenue, for further disaggregation of revenue by operating segment.
Year Ended December 31,
2024
2023
2022
Cost of goods sold
Ethanol production (1)(2)
$
1,983,460 $
2,705,917 $
3,018,625
Agribusiness and energy services
374,286
454,776
562,950
Intersegment eliminations
(29,400)
(29,701)
(31,406)
$
2,328,346 $
3,130,992 $
3,550,169
Year Ended December 31,
2024
2023
2022
Gross margin
Ethanol production (1)(2)
$
83,629 $
118,624 $
60,015
Agribusiness and energy services
46,821
46,127
52,665
$
130,450 $
164,751 $
112,680
Year Ended December 31,
2024
2023
2022
Depreciation and amortization
Ethanol production
$
82,784 $
92,712 $
85,638
Agribusiness and energy services
2,185
2,360
3,466
Corporate activities (3)
5,618
3,172
3,594
$
90,587 $
98,244 $
92,698
F-21
Year Ended December 31,
2024
2023
2022
Operating income (loss)
Ethanol production (2)
$
(40,758) $
(19,958) $
(66,485)
Agribusiness and energy services
28,156
28,100
36,415
Corporate activities (4)
(34,857)
(69,720)
(68,878)
$
(47,459) $
(61,578) $
(98,948)
(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)
Ethanol production includes an inventory lower of cost or net realizable value adjustment of $2.1 million, $2.6 million, and $12.3 million for the
years-ended December 31, 2024, 2023, and 2022, respectively.
(3)
Depreciation and amortization for corporate activities includes impairment of a research and development technology intangible asset of $3.5
million for the year ended December 31, 2024.
(4)
Corporate activities for the years-ended December 31, 2024 and 2023 include a $30.7 million and $4.1 million gain on sale of assets, respectively.
The following tables reconcile EBITDA, our segment measure of profit or loss, to net loss (in thousands). EBITDA is
defined as earnings before interest expense, income taxes, depreciation and amortization excluding the amortization of right-
of-use assets and debt issuance costs.
F-22
Year Ended December 31, 2024
Ethanol
production
Agribusiness and
energy services
Subtotal
EBITDA
$
39,645 $
31,935 $
71,580
Depreciation and amortization
(82,784)
(2,185)
(84,969)
Interest expense
(22,056)
(4,722)
(26,778)
Subtotal
$
(65,195) $
25,028 $
(40,167)
Unallocated corporate expenses (1)
(35,869)
Income tax expense, net of equity method income taxes
(5,153)
Net loss
$
(81,189)
Year Ended December 31, 2023
Ethanol
production
Agribusiness and
energy services
Subtotal
EBITDA
$
78,561 $
31,689 $
110,250
Depreciation and amortization
(92,712)
(2,360)
(95,072)
Interest expense
(23,545)
(7,723)
(31,268)
Subtotal
$
(37,696) $
21,606 $
(16,090)
Unallocated corporate expenses (1)
(65,826)
Income tax benefit, net of equity method income taxes
5,617
Net loss
$
(76,299)
Year Ended December 31, 2022
Ethanol
production
Agribusiness and
energy services
Subtotal
EBITDA
$
47,390 $
39,798 $
87,188
Depreciation and amortization
(85,638)
(3,466)
(89,104)
Interest expense
(14,310)
(8,922)
(23,232)
Subtotal
$
(52,558) $
27,410 $
(25,148)
Unallocated corporate expenses (1)
(73,482)
Income tax expense, net of equity method income taxes
(4,747)
Net loss
$
(103,377)
(1)
Corporate expenses include selling, general administrative expenses, gain on sale of assets, depreciation and amortization, and interest expense.
The following table sets forth capital expenditures by operating segment (in thousands):
Year Ended December 31,
2024
2023
2022
Capital expenditures
Ethanol production
$
89,230 $
107,468 $
210,897
Agribusiness and energy services
833
512
1,647
Corporate activities
5,021
494
75
$
95,084 $
108,474 $
212,619
F-23
The following table sets forth total assets by operating segment (in thousands):
Year Ended December 31,
2024
2023
Total assets (1)
Ethanol production
$
1,234,635 $
1,275,562
Agribusiness and energy services
412,006
413,937
Corporate assets
143,716
254,300
Intersegment eliminations
(8,183)
(4,477)
$
1,782,174 $
1,939,322
(1)
Asset balances by segment exclude intercompany balances.
7. INVENTORIES
Inventories are carried at the lower of average cost or net realizable value, except fair-value hedged inventories. As of
December 31, 2024 and 2023, respectively, the company recorded a $2.1 million and $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.
The components of inventories are as follows (in thousands):
December 31,
2024
2023
Finished goods
$
72,863 $
73,975
Commodities held for sale
48,500
45,898
Raw materials
37,334
32,820
Work-in-process
13,569
14,454
Supplies and parts
55,178
48,663
$
227,444 $
215,810
8. PROPERTY AND EQUIPMENT
The components of property and equipment are as follows (in thousands):
December 31,
2024
2023
Plant equipment
$
1,200,795 $
1,175,566
Buildings and improvements
218,660
218,269
Land and improvements
107,543
107,399
Railroad track and equipment
32,137
32,752
Construction-in-progress
174,151
115,243
Computer hardware and software
27,829
23,645
Office furniture and equipment
3,422
3,580
Leasehold improvements and other
27,516
31,551
Total property and equipment
1,792,053
1,708,005
Less: accumulated depreciation and amortization
(749,593)
(686,077)
Property and equipment, net
$
1,042,460 $
1,021,928
Interest capitalized during the years ended December 31, 2024, 2023 and 2022 totaled $4.4 million, $3.6 million and
F-24
$11.3 million, respectively.
9. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The company has one reporting unit to which goodwill was assigned. We are required to perform impairment tests
related to our goodwill annually, which we perform as of October 1, or if an indicator of impairment occurs. The company
performed its annual goodwill assessments as of October 1, 2024 and 2023 using qualitative assessments, which resulted in
no indication of goodwill impairment.
On September 30, 2024, goodwill of $10.6 million was disposed of in the Birmingham Transaction, which previously
was recorded within the ethanol production segment. The carrying amount of goodwill attributable to the ethanol production
segment for the years ended December 31, 2024 and 2023 was $18.5 million and $29.1 million, respectively. The company
records goodwill within other assets on the consolidated balance sheets.
Intangible Assets
The company recognized certain intangible assets in connection with the FQT acquisition during the fourth quarter of
2020. The components of the intangible assets are as follows (in thousands):
December 31,
2024
2023
Customer relationships and backlog
$
17,628 $
17,628
Intellectual property
9,700
9,700
Trade name
1,300
1,300
Total
28,628
28,628
Accumulated amortization
(15,962)
(13,483)
Total intangible assets, net
$
12,666 $
15,145
Weighted average remaining amortization period
8.9 years
9.9 years
The company recognized $2.5 million, $2.8 million, and $4.8 million of amortization expense associated with these
intangible assets during the years ended December 31, 2024, 2023 and 2022, respectively. The company expects estimated
amortization expense of $2.2 million, $2.0 million, $1.8 million, $1.6 million and $0.5 million, respectively, for the years
ended December 31, 2025, 2026, 2027, 2028 and 2029, as well as $4.6 million thereafter. The company’s intangible assets
are recorded within other assets on the consolidated balance sheets.
10. DERIVATIVE FINANCIAL INSTRUMENTS
At December 31, 2024, the company’s consolidated balance sheet reflected unrealized gains of $1.0 million, net of tax,
in accumulated other comprehensive income. The company expects these items will be reclassified as 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.
F-25
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 at December 31,
Liability Derivatives'
Fair Value at December 31,
2024
2023
2024
2023
Derivative financial instruments - forwards
$
10,154
$
13,311 (2) $
4,791 (1) $
10,577
Other liabilities
—
—
15
2
Total
$
10,154
$
13,311
$
4,806
$
10,579
(1)
At December 31, 2024, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange-traded
futures and options contracts of $4.7 million, which include $0.5 million of net unrealized gains on derivative financial instruments designated as
cash flow hedging instruments, $3.0 million of unrealized losses 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 5 - 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 Loss
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):
Location of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income into Income
Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income
into Income
Year Ended December 31,
2024
2023
2022
Revenues
$
9,832 $
2,482 $
3,347
Cost of goods sold
(23,270)
(25,003)
(5,753)
Net loss recognized in loss before income taxes
$
(13,438) $
(22,521) $
(2,406)
Gain (Loss) Recognized in
Other Comprehensive Income on Derivatives
Amount of Gain (Loss) Recognized in Other
Comprehensive Income on Derivatives
Year Ended December 31,
2024
2023
2022
Commodity Contracts
$
(8,001) $
8,369 $
(21,201)
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
F-26
local markets including transportation as well as quality or grade differences.
Derivatives Not Designated
as Hedging Instruments
Location of Gain (Loss)
Recognized in
Income on Derivatives
Amount of Gain (Loss) Recognized in
Income on Derivatives
Year Ended December 31,
2024
2023
2022
Exchange-traded futures and
options
Revenues
$
4,246 $
(2,552) $
2,470
Forwards
Revenues
(4,446)
4,842
(7,404)
Exchange-traded futures and
options
Cost of goods sold
24,045
45,065
(59,697)
Forwards
Cost of goods sold
5,442
(4,265)
(6,381)
Net gain (loss) recognized in loss before income taxes
$
29,287 $
43,090 $
(71,012)
The following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the
fair value hedged items (in thousands):
December 31, 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
$
48,500 $
8,166 $
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
Year Ended December 31, 2024
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
$
9,832 $
(23,270)
Gain (loss) on fair value hedging relationships
Commodity contracts
Fair value hedged inventories
—
6,398
Exchange-traded futures designated as hedging instruments
—
(6,039)
Total amounts of income and expense line items presented in the
consolidated statement of operations in which the effects of cash flow or
fair value hedges are recorded
$
9,832 $
(22,911)
F-27
Location and Amount of Gain (Loss)
Recognized in Income on Cash Flow and
Fair Value Hedging Relationships for the
Year Ended December 31, 2023
Revenue
Cost of
Goods Sold
Gain (loss) on cash flow hedging relationships
Commodity contracts
Amount of gain (loss) on exchange traded futures reclassified from
accumulated other comprehensive income into income
$
2,482 $
(25,003)
Gain (loss) on fair value hedging relationships
Commodity contracts
Fair value hedged inventories
—
(11,657)
Exchange-traded futures designated as hedging instruments
—
14,417
Total amounts of income and expense line items presented in the
consolidated statement of operations in which the effects of cash flow or
fair value hedges are recorded
$
2,482 $
(22,243)
Location and Amount of Gain (Loss)
Recognized in Income on Cash Flow and
Fair Value Hedging Relationships for the
Year Ended December 31, 2022
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
$
3,347 $
(5,753)
Gain (loss) on fair value hedging relationships
Commodity contracts
Fair value hedged inventories
—
735
Exchange-traded futures designated as hedging instruments
—
5,677
Total amounts of income and expense line items presented in the
consolidated statement of operations in which the effects of cash flow or
fair value hedges are recorded
$
3,347 $
659
F-28
The notional volume of open commodity derivative positions as of December 31, 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
(2,570)
Bushels
Corn
Futures
280 (3)
Bushels
Corn
Futures
(6,915) (4)
Bushels
Corn
Futures
(46,536)
Gallons
Ethanol
Futures
(840) (3)
Gallons
Ethanol
Futures
388
MmBTU
Natural Gas
Futures
3,205 (3)
MmBTU
Natural Gas
Futures
(4,390) (4)
MmBTU
Natural Gas
Futures
(8)
Tons
Soybean Meal
Options
(6)
Tons
Soybean Meal
Options
2,384
Bushels
Corn
Options
378
MmBTU
Natural Gas
Forwards
31,742
—
Bushels
Corn
Forwards
2,784
(202,522)
Gallons
Ethanol
Forwards
90
(212)
Tons
Distillers Grains
Forwards
—
(48,733)
Pounds
Renewable Corn Oil
Forwards
7,991
(1,569)
MmBTU
Natural Gas
(1)
Notional volume of exchange-traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-
adjusted basis.
(2)
Notional volume of non-exchange-traded forward physical contracts are presented on a gross long and (short) position basis, including both
fixed-price and basis contracts, for which only the basis portion of the contract price is fixed.
(3)
Notional volume of exchange-traded futures used for cash flow hedges.
(4)
Notional volume of exchange-traded futures used for fair value hedges.
Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated
statements of operations. Included in revenues are net gains of $4.1 million, $4.8 million, and $4.0 million for the years ended
December 31, 2024, 2023 and 2022, respectively, on energy trading contracts.
F-29
11. DEBT
The components of long-term debt are as follows (in thousands):
December 31,
2024
2023
Corporate
2.25% convertible notes due 2027 (1)
$
230,000 $
230,000
Green Plains SPE LLC
$125.0 million junior secured mezzanine notes due 2026 (2)
125,000
125,000
Green Plains Shenandoah
$75.0 million loan agreement (3)
71,625
73,125
Green Plains Partners
$60.0 million term loan (4)
—
55,969
Other
11,163
14,669
Total book value of long-term debt
437,788
498,763
Unamortized debt issuance costs
(3,210)
(5,013)
Less: current maturities of long-term debt
(2,118)
(1,832)
Total long-term debt
$
432,460 $
491,918
(1)
The 2.25% notes had $2.7 million and $4.0 million of unamortized debt issuance costs as of December 31, 2024 and 2023, respectively.
(2)
The junior notes had $0.2 million and $0.4 million of unamortized debt issuance costs as of December 31, 2024 and 2023, respectively.
(3)
The loan had $0.3 million of unamortized debt issuance costs as of both December 31, 2024 and 2023.
(4)
The term loan had $0.3 million of unamortized debt issuance costs as of December 31, 2023.
Scheduled long-term debt repayments excluding the effects of debt issuance costs, are as follows (in thousands):
Year Ending December 31,
Amount
2025
$
2,207
2026
127,222
2027
232,231
2028
2,169
2029
2,192
Thereafter
71,767
Total
$
437,788
The components of short-term notes payable and other borrowings are as follows (in thousands):
December 31,
2024
2023
Green Plains Finance Company, Green Plains Grain and Green Plains Trade
$350.0 million revolver
$
133,500 $
99,000
Green Plains Commodity Management
$40.0 million hedge line
7,329
6,973
$
140,829 $
105,973
Corporate Activities
In March 2021, the company issued an aggregate $230.0 million of 2.25% convertible senior notes due on March 15,
2027, or the 2.25% notes. The 2.25% notes bear interest at a rate of 2.25% per year, payable on March 15 and September 15
F-30
of each year. The 2.25% notes are senior, unsecured obligations of the company. The 2.25% notes are convertible, at the
option of the holders, into consideration consisting of, at the company’s election, cash, shares of the company’s common
stock, or a combination of cash and stock (and cash in lieu of fractional shares). However, before September 15, 2026, the
2.25% notes will not be convertible unless certain conditions are satisfied. The initial conversion rate is 31.6206 shares of the
company’s common stock per $1,000 principal amount of 2.25% notes (equivalent to an initial conversion price of
approximately $31.62 per share of the company’s common stock), representing an approximately 37.5% premium over the
offering price of the company’s common stock. The conversion rate is subject to adjustment upon the occurrence of certain
events, including but not limited to; the event of a stock dividend or stock split; the issuance of additional rights, options and
warrants; spinoffs; or a tender or exchange offering. In addition, the company may be obligated to increase the conversion
rate for any conversion that occurs in connection with certain corporate events, including the company’s calling the 2.25%
notes for redemption.
On and after March 15, 2024, and prior to the maturity date, the company may redeem, for cash, all, but not less than all,
of the 2.25% notes if the last reported sale price of the company’s common stock equals or exceeds 140% of the applicable
conversion price on (i) at least 20 trading days during a 30 consecutive trading day period ending on the trading day
immediately prior to the date the company delivers notice of the redemption; and (ii) the trading day immediately before the
date of the redemption notice. The redemption price will equal 100% of the principal amount of the 2.25% notes to be
redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date. In addition, upon the occurrence of a
“fundamental change” (as defined in the indenture for the 2.25% notes), holders of the 2.25% notes will have the right, at
their option, to require the company to repurchase their 2.25% notes for cash at a price equal to 100% of the principal amount
of the 2.25% notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase
date.
In June 2019, the company issued $115.0 million of 4.00% convertible senior notes due in 2024, or the 4.00% notes. On
May 25, 2022, the company gave notice calling for the redemption of its outstanding 4.00% notes, totaling an aggregate
principal amount of $64.0 million. The final conversion rate was 66.4178 shares of common stock per $1,000 of principal.
From July 1, 2022 through July 8, 2022, the remaining $64.0 million of the 4.00% notes were converted into approximately
4.3 million shares of common stock. Common stock held as treasury shares were exchanged for the 4.00% notes. Pursuant to
the guidance within ASC 470, Debt, the company recorded the exchanges as a conversion. The 4.00% notes were retired
effective July 8, 2022.
In August 2016, the company issued $170.0 million of 4.125% convertible senior notes due in 2022, or the 4.125%
notes. The 4.125% notes were senior, unsecured obligations of the company. During August 2022, the company entered into
four privately negotiated exchange agreements with certain noteholders of the 4.125% notes to exchange approximately
$32.6 million aggregate principal amount for approximately 1.2 million shares of the company's common stock. Pursuant to
the guidance within ASC 470, Debt, the company recorded the exchanges as a conversion and recorded a loss of $419
thousand, which was recorded as a charge to interest expense in the consolidated financial statements during the year ended
December 31, 2022. Additionally, on September 1, 2022, approximately $1.7 million aggregate principal amount of the
4.125% notes were settled through a combination of $1.7 million in cash and approximately 15 thousand shares of the
company's common stock. The remaining $23 thousand aggregate principal amount and accrued interest were settled in cash.
The 4.125% notes were fully retired effective September 1, 2022.
Ethanol Production Segment
On February 9, 2021, Green Plains SPE LLC, a wholly-owned special purpose subsidiary and parent of Green Plains
Obion and Green Plains Mount Vernon, issued $125.0 million of junior secured mezzanine notes due 2026 (the “Junior
Notes”) with BlackRock, a holder of a portion of the company’s common stock.
The Junior Notes will mature on February 9, 2026 and are secured by a pledge of the membership interests in and the
real property owned by Green Plains Obion and Green Plains Mount Vernon. The proceeds of the Junior Notes were used to
construct Ultra-High Protein processing systems at the Green Plains Obion and Green Plains Mount Vernon facilities. The
Junior Notes accrue interest at an annual rate of 11.75%. However, subject to the satisfaction of certain conditions, Green
Plains SPE LLC may elect to pay an amount in cash equal to interest accruing at a rate of 6.00% per annum plus an amount
equal to interest accruing at a rate of 6.75% per annum to be paid in kind. The entire outstanding principal balance, plus any
accrued and unpaid interest is due upon maturity. Green Plains SPE LLC is required to comply with certain financial
covenants regarding minimum liquidity at Green Plains and a maximum aggregate loan to value. The Junior Notes can be
retired or refinanced after 42 months with no prepayment premium. The Junior Notes have an unsecured parent guarantee
from the company and have certain limitations on distributions, dividends or loans to the company unless there will not exist
any event of default.
F-31
On September 3, 2020, Green Plains Wood River and Green Plains Shenandoah, wholly-owned subsidiaries of the
company, entered into a $75.0 million loan agreement with MetLife Real Estate Lending LLC. The loan matures on
September 1, 2035 and is secured by substantially all of the assets of the Shenandoah facility. During the second quarter of
2024, the agreement was modified to remove the Wood River facility from the assets considered to be secured under the loan
agreement and Green Plains Wood River was removed as a counterparty to the loan agreement. The proceeds from the loan
were used to add MSC™ technology at the Wood River and Shenandoah facilities as well as other capital expenditures.
The loan bears interest at a fixed rate of 5.02%, plus an interest rate premium, subject to quarterly adjustments, of 0.00%
to 1.50% based on the leverage ratio of total funded debt to EBITDA of Shenandoah. Principal payments of $1.5 million per
year began in October 2022. Prepayments were prohibited until September 2024. Financial covenants of the loan agreement
include a minimum loan to value ratio of 50%, a minimum fixed charge coverage ratio of 1.25x, a total debt service reserve
of six months of future principal and interest payments and a minimum working capital requirement at Green Plains of not
less than $0.10 per gallon of nameplate capacity or $90.3 million. The loan is guaranteed by the company and has certain
limitations on distributions, dividends or loans to Green Plains by Shenandoah unless immediately after giving effect to such
action, there will not exist any event of default. At December 31, 2024, the interest rate on the loan was 5.77%.
Green Plains Partners had a term loan to fund working capital, capital expenditures and other general partnership
purposes. Interest on the term loan was based on 3-month SOFR plus 8.26%. On September 30, 2024, the proceeds from the
Birmingham Transaction were used to repay the outstanding principal and interest of the loan in full. Prepayments totaling
$56.0 million, $3.0 million and $1.0 million were made during the years ended December 31, 2024, 2023 and 2022,
respectively.
The company also has small equipment financing loans, finance leases on equipment or facilities, and other forms of
debt financing.
Agribusiness and Energy Services Segment
On March 25, 2022, Green Plains Finance Company, Green Plains Grain and Green Plains Trade (collectively, the
“Borrowers”), all wholly owned subsidiaries of the company, together with the company, as guarantor, entered into a five-
year, $350.0 million senior secured sustainability-linked revolving Loan and Security Agreement (the “Facility”) with a
group of financial institutions. This transaction refinanced the separate credit facilities previously held by Green Plains Grain
and Green Plains Trade. The Facility matures on March 25, 2027.
The Facility includes revolving commitments totaling $350.0 million and an accordion feature whereby amounts
available under the Facility may be increased by up to $100.0 million of new lender commitments subject to certain
conditions. Each SOFR rate loan shall bear interest for each day at a rate per annum equal to the Term SOFR rate for the
outstanding period plus a Term SOFR adjustment and an applicable margin of 2.25% to 2.50%, which is dependent on
undrawn availability under the Facility. Each base rate loan shall bear interest at a rate per annum equal to the base rate plus
the applicable margin of 1.25% to 1.50%, which is dependent on undrawn availability under the Facility. The unused portion
of the Facility is also subject to a commitment fee of 0.275% to 0.375%, dependent on undrawn availability. Additionally, the
applicable margin and commitment fee are subject to certain increases or decreases of up to 0.10% and 0.025%, respectively,
tied to the company’s achievement of certain sustainability criteria, including the reduction of GHG emissions, recordable
incident rate reduction, increased renewable corn oil production and the implementation of technology to produce sustainable
ingredients.
The Facility contains customary affirmative and negative covenants, as well as the following financial covenants to be
calculated as of the last day of any month: the current ratio of the Borrowers shall not be less than 1.00 to 1.00; the collateral
coverage ratio of the Borrowers shall not be less than 1.20 to 1.00; and the debt to capitalization ratio of the company shall
not be greater than 0.60 to 1.00.
The Facility also includes customary events of default, including without limitation, failure to make required payments
of principal or interest, material incorrect representations and warranties, breach of covenants, events of bankruptcy and other
certain matters. The Facility is secured by the working capital assets of the Borrowers and is guaranteed by the company. At
December 31, 2024, the interest rate on the Facility was 7.88%.
Green Plains Commodity Management has an uncommitted $40.0 million revolving credit facility to finance margins
related to its hedging programs, which is secured by cash and securities held in its brokerage accounts. During the first
quarter of 2023, this revolving credit facility was extended five years to mature on April 30, 2028. Advances are subject to
variable interest rates equal to SOFR plus 1.75%. At December 31, 2024, the interest rate on the facility was 6.12%.
F-32
Green Plains Grain has a short-term inventory financing agreement with a financial institution. The company has
accounted for the agreement as short-term notes, rather than revenues, and has elected the fair value option to offset
fluctuations in market prices of the inventory. This agreement is subject to negotiated variable interest rates. The company
had no outstanding short-term notes payable related to the inventory financing agreement as of December 31, 2024.
Covenant Compliance
The company was in compliance with its debt covenants as of December 31, 2024.
Restricted Net Assets
At December 31, 2024, there were approximately $12.8 million of net assets at the company’s subsidiaries that could not
be transferred to the parent company in the form of dividends, loans or advances due to restrictions contained in the credit
facilities of these subsidiaries.
12. STOCK-BASED COMPENSATION
The company has an equity incentive plan, which reserved a total of 6.9 million shares of common stock for issuance
pursuant to the plan, of which 2.1 million shares remain available for issuance as of December 31, 2024. The plan provides
for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common
stock, restricted stock, performance share awards, and restricted and deferred stock unit awards, to be granted to eligible
employees, non-employee directors and consultants. The company measures stock-based compensation at fair value on the
grant date, with no adjustments for estimated forfeitures. The company records noncash compensation expense related to
equity awards in its consolidated financial statements over the requisite period on a straight-line basis.
Grants under the equity incentive plans may include stock options, stock awards, performance share awards or deferred
stock units:
•
Restricted Stock Awards – Restricted stock awards may be granted to directors and employees that vest immediately
or over a period of time as determined by the compensation committee. Stock awards granted to date vested
immediately and over a period of time, and included sale restrictions. Compensation expense is recognized on the
grant date if fully vested or over the requisite vesting period.
•
Deferred Stock Units – Deferred stock units may be granted to directors and employees that vest immediately or
over a period of time as determined by the compensation committee. Deferred stock units granted to date vest over a
period of time with underlying shares of common stock that are issuable after the vesting date. Compensation
expense is recognized on the grant date if fully vested, or over the requisite vesting period.
•
Performance Share Awards – Performance share awards may be granted to directors and employees that cliff-vest
after a period of time as determined by the compensation committee. Performance share awards granted to date cliff-
vest after a period of time, and include sale restrictions. Compensation expense is recognized over the requisite
vesting period.
•
Stock Options – Stock options may be granted that can be exercised immediately in installments or at a fixed future
date. Certain options are exercisable regardless of employment status while others expire following termination.
Options issued to date could have been exercised immediately or at future vesting dates, and expired five years to
eight years after the grant date. Compensation expense for stock options that vest over time was recognized on a
straight-line basis over the requisite service period.
F-33
Restricted Stock Awards and Deferred Stock Units
The restricted non-vested stock awards and deferred stock units activity for the year ended December 31, 2024 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, 2023
607,894
$
30.79
Granted
523,402
19.14
Forfeited
(10,915)
25.01
Vested
(384,868)
29.14
Non-Vested at December 31, 2024
735,513
$
23.45
1.7
Performance Share Awards
On March 13, 2024, March 9, 2023, and March 14, 2022, the board of directors granted performance shares to be
awarded in the form of common stock to certain participants of the plan. These performance shares vest based on the level of
achievement of certain performance goals, including the incremental value achieved from the company's high-protein and
clean sugar initiatives, annual production levels and return on investment (ROI). Performance shares granted in 2024 include
certain market-based factors requiring a Monte Carlo valuation model to estimate the fair value of the performance shares on
the date of the grant. The weighted average assumptions used by the company in applying the Monte Carlo valuation model
for performance share grants and related valuation include a risk-free interest rate of 4.44%, dividend yields of 0%, expected
volatility of 54.6% and a closing stock price on the date of grant of $20.21, resulting in an estimated fair value of $25.23 per
share. Performance shares granted in 2023 and 2022 do not contain market-based factors requiring a Monte Carlo valuation
model. The performance shares were granted at a target of 100%, but each performance share can be reduced or increased
depending on results for the performance period. If the company achieves the maximum performance goals, the maximum
amount of shares available to be issued pursuant to the 2024, 2023 and 2022 awards are 1,077,144 performance shares which
represents 200% of the 538,572 performance shares which remain outstanding. The actual number of performance shares that
will ultimately vest is based on the actual performance targets achieved at the end of the performance period.
On February 18, 2021, the board of directors granted performance shares to be awarded in the form of common stock to
certain participants of the plan. The performance shares were granted at a target of 100%, but each performance share was
reduced or increased depending on results for the performance period. On February 16, 2024, based on the criteria discussed
above, the 118,673 2021 performance shares vested at 115%, which resulted in the issuance of 136,475 shares of common
stock.
The non-vested performance share award activity for the year ended December 31, 2024 is as follows:
Performance
Shares
Weighted-
Average
Grant-
Date Fair
Value
Weighted-
Average
Remaining
Vesting Term
(in years)
Non-Vested at December 31, 2023
404,740 $
30.51
Granted
270,307
23.00
Vested
(136,475)
26.22
Non-Vested at December 31, 2024
538,572 $
27.82
1.4
Green Plains Partners
Green Plains Partners had a long-term incentive plan (LTIP) intended to promote the interests of the partnership, its
general partner and affiliates by providing unit-based incentive compensation awards to employees, consultants and directors
F-34
to encourage superior performance. As a result of the Merger, the LTIP units available for issuance were converted to 1.2
million shares available for issuance under the company's equity incentive plan.
The non-vested unit-based awards activity for the year ended December 31, 2024 are as follows:
Non-Vested
Units
Weighted-
Average
Grant-Date
Fair Value
Weighted-
Average
Remaining
Vesting Term
(in years)
Non-Vested at December 31, 2023
18,549
$
12.94
Vested (1)
(18,549)
12.94
Non-Vested at December 31, 2024 (1)
— $
—
0.0
(1)
Pursuant to the Merger Agreement, each of these unvested awards became fully vested at the effective time of the Merger on January 9, 2024.
Stock-Based Compensation Expense
Compensation costs for the stock-based payment plan during the years ended December 31, 2024, 2023 and 2022, were
approximately $8.3 million, $13.0 million and $9.1 million, respectively. At December 31, 2024, there was $14.2 million of
unrecognized compensation costs from stock-based compensation related to non-vested awards. This compensation is
expected to be recognized over a weighted-average period of approximately 1.7 years. The potential tax benefit related to
stock-based payment is approximately 24.0% of these expenses.
13. EARNINGS PER SHARE
Basic earnings per share, or EPS, is calculated by dividing net income available to common stockholders by the weighted
average number of common shares outstanding during the period.
The company computes diluted EPS by dividing net income on an if-converted basis, adjusted to add back net interest
expense related to the convertible debt instruments, by the weighted average number of common shares outstanding during
the period, adjusted to include the shares that would be issued if the convertible debt instruments were converted to common
shares and the effect of any outstanding dilutive securities.
The basic and diluted EPS are calculated as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Net loss attributable to Green Plains
$
(82,497) $
(93,384) $
(127,218)
Weighted average shares outstanding - basic and diluted
63,796
58,814
55,541
EPS - basic and diluted
$
(1.29) $
(1.59) $
(2.29)
Anti-dilutive weighted-average convertible debt, warrants and stock-based
compensation (1)
7,696
8,419
8,556
(1)
The effect related to the company's convertible debt, warrants and certain stock-based compensation award has been excluded from diluted EPS
for the periods presented as the inclusion of these shares would have been antidilutive.
14. STOCKHOLDERS’ EQUITY
As a result of the Merger, for the year ended December 31, 2024, the company issued approximately 4.7 million shares
of common stock and recorded par value $0.001 per share, paid cash consideration of $29.2 million, extinguished the non-
controlling interest attributed to the partnership common units held by the public of $133.8 million, and recorded transaction
costs of $7.5 million within additional paid-in capital. Refer to Note 4 – Merger and Dispositions included herein for more
information.
F-35
Warrants
During the three months ended March 31, 2021, in connection with certain agreements, the company issued warrants in a
private placement to purchase shares of its common stock. The company measures the fair value of the warrants using the
Black-Scholes option pricing model as of the issuance date. Exercisable warrants are equity based and recorded as a
reduction in additional paid-in capital.
The company has reserved 2,550,000 shares of common stock for the exercise of warrants to non-employees, of which
2,275,000 are exercisable, treated as equity based awards and recorded as a reduction in additional paid-in capital. The
remaining 275,000 warrants, of which 194,444 are exercisable as a result of achieving certain earn-out provisions and 80,556
are contingent upon certain earn-out provisions, are treated as liability based awards, and valued quarterly using the
company’s stock price. These warrants could potentially dilute basic earnings per share in future periods. The exercise price
of the warrants is $22.00 and expiration dates are December 8, 2025 for 275,000 warrants, February 9, 2026 for 275,000
warrants and April 28, 2026 for 2,000,000 warrants.
Convertible Note Exchange
On May 25, 2022, the company gave notice calling for the redemption of all its outstanding 4.00% Convertible Senior
Notes due 2024, totaling an aggregate principal amount of $64.0 million. The conversion rate was 66.4178 shares of common
stock per $1,000 of principal. From July 1, 2022 through July 8, 2022, all $64.0 million of the 4.00% convertible notes were
converted into approximately 4.3 million shares of common stock.
During August 2022, the company entered into four privately negotiated exchange agreements with certain noteholders
of the 4.125% Convertible Senior Notes due 2022 to exchange approximately $32.6 million aggregate principal amount for
approximately 1.2 million shares of the company's common stock. Additionally, on September 1, 2022, approximately
$1.7 million aggregate principal amount was settled through a combination of $1.7 million in cash and approximately
15 thousand shares of the company's common stock.
Treasury Stock
The company holds 2.8 million shares of its common stock at a cost of $31.2 million. Treasury stock is recorded at cost
and reduces stockholders’ equity in the consolidated balance sheets. When shares are reissued, the company will use the
weighted average cost method for determining the cost basis. The difference between the cost and the issuance price is added
or deducted from additional paid-in capital.
Share Repurchase Program
The company’s board of directors authorized a share repurchase program of up to $200.0 million. Under the program, the
company may repurchase shares in open market transactions, privately negotiated transactions, accelerated share buyback
programs, tender offers or by other means. The timing and amount of repurchase transactions are determined by its
management based on market conditions, share price, legal requirements and other factors. The program may be suspended,
modified or discontinued at any time without prior notice. The company did not repurchase any shares of common stock
during 2024, 2023 or 2022. Since inception, the company has repurchased 7.4 million shares of common stock for
approximately $92.8 million under the program.
F-36
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) are associated primarily with gains and losses on derivative
financial instruments. Amounts reclassified from accumulated other comprehensive income (loss) are as follows (in
thousands):
Year Ended December 31,
Statements of
Operations
Classification
2024
2023
2022
Gains (losses) on cash flow hedges
Commodity derivatives
$
9,832 $
2,482 $
3,347
(1)
Commodity derivatives
(23,270)
(25,003)
(5,753)
(2)
Total losses on cash flow hedges
(13,438)
(22,521)
(2,406)
(3)
Income tax benefit
(3,223)
(5,438)
(578)
(4)
Amounts reclassified from accumulated other
comprehensive loss
$
(10,215) $
(17,083) $
(1,828)
(1)
Revenues
(2)
Cost of goods sold
(3)
Loss before income taxes and income from equity method investees
(4)
Income tax benefit (expense)
At December 31, 2024 and 2023, the company’s consolidated balance sheets reflected unrealized gains of $1.0 million
and unrealized losses of $3.2 million, net of tax, in accumulated other comprehensive loss, respectively.
15. INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their
respective tax bases, and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured
using enacted rates expected to be applicable to taxable income in the years those temporary differences are recovered or
settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income during the period
that includes the enactment date. A valuation allowance is recorded by the company when it is more likely than not that some
portion or all of a deferred tax asset will not be realized.
On January 9, 2024, the transactions contemplated by the Merger Agreement were completed as described in more detail
in Note 4 – Merger and Dispositions included herein. For income tax purposes, the total consideration given by the company
in exchange for the remaining interest in the partnership, creates a tax basis in the acquired interest. Because the GAAP basis
in the acquired interest is less than the total consideration, a new deferred tax asset was created. The company's valuation
allowance on deferred tax assets increased by a corresponding amount, which did not have a material impact on the
company's consolidated financial statements.
In November 2024, the company reached an agreement in-principle with the IRS Independent Office of Appeals related
to our federal R&D tax credit audit covering tax years 2013 through 2018. As a result of the agreement in-principle, the
company increased our reserve for unrecognized tax benefits by $28.2 million to reflect the estimated tax credit carryforward
post settlement. This increase in unrecognized tax benefits was recorded in income tax expense net of previously recorded
valuation allowance.
The IRA was signed into law on August 16, 2022. The IRA includes significant law changes relating to tax, climate
change, energy and health care. The IRA significantly expands clean energy incentives by providing an estimated $370
billion of new energy related tax credits over the next ten years. It also permits more flexibility for taxpayers to use the
credits with direct-pay and transferable credit options. In addition, the IRA includes key revenue-raising provisions which
include a 15% book-income alternative minimum tax on corporations with adjusted financial statement income over $1
billion, a 1% excise tax on the value of certain net stock repurchases by publicly traded companies, and the reinstatement of
Superfund excise taxes.
F-37
Income tax expense (benefit) consists of the following (in thousands):
Year Ended December 31,
2024
2023
2022
Current
$
2,268 $
1,238 $
232
Deferred
3,944
(6,855)
4,515
Total income tax expense (benefit)
$
6,212 $
(5,617) $
4,747
Differences between income tax expense (benefit) at the statutory federal income tax rate and as presented on the
consolidated statements of operations are summarized as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Tax expense at federal statutory rate
$
(14,750) $
(17,293) $
(21,222)
State income tax expense (benefit), net of federal benefit
1,123
(662)
746
Nondeductible compensation
1,388
2,787
1,221
Noncontrolling interests
(150)
(3,660)
(5,245)
Dissolution of MLP
23,919
—
—
R&D tax credit audit agreement in-principle
(232)
—
—
Increase (decrease) in valuation allowance
(5,491)
15,892
27,778
Stock compensation
278
(4,440)
1,105
Other
127
1,759
364
Income tax expense (benefit)
$
6,212 $
(5,617) $
4,747
F-38
Significant components of deferred tax assets and liabilities are as follows (in thousands):
December 31,
2024
2023
Deferred tax assets
Net operating loss carryforwards - Federal
$
26,104 $
7,824
Net operating loss carryforwards - State
15,777
12,909
Tax credit carryforwards - Federal
35,098
63,050
Tax credit carryforwards - State
1,359
5,225
Section 174 capitalized expenses
54,470
63,267
Interest expense carryforward
20,003
16,996
Investment in partnerships and joint ventures
3,807
49,735
Inventory valuation
983
2,079
Stock-based compensation
1,377
2,371
Accrued expenses
7,818
5,200
Lease obligations
18,693
9,514
Organizational and start-up costs
379
335
Other
1,580
824
Total
187,448
239,329
Valuation allowance
(77,657)
(117,258)
Total deferred tax assets
109,791
122,071
Deferred tax liabilities
Fixed assets
(98,485)
(114,690)
Derivative financial instruments
(78)
(1,238)
Right-of-use assets
(17,081)
(6,746)
Total deferred tax liabilities
(115,644)
(122,674)
Deferred income taxes
$
(5,853) $
(603)
At December 31, 2024, the company has federal research and development credits of $35.1 million which will begin to
expire in 2033. The company also has $1.4 million of state credits which will expire, subject to taxable income, beginning in
2025. The company has federal net operating losses of $26.1 million which do not have an expiration date.
The company has established a valuation allowance against its deferred tax assets due to uncertainty that it will realize
these assets in the future. The valuation allowance on deferred tax assets was recognized as a result of negative evidence,
including cumulative losses in recent years, outweighing the more subjective positive evidence. Management considers
whether it is more likely than not that some or all of the deferred tax assets will be realized, which is dependent on the
generation of future taxable income and other tax attributes during the periods those temporary differences become
deductible. Scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies are
considered to make this assessment. The company will continue to regularly assess the realizability of deferred tax assets.
Changes in earnings performance and future earnings projections, among other factors, may cause the company to adjust its
valuation allowance on deferred tax assets, which would impact the company’s results of operations in the period it is
determined that these factors have changed.
In November 2024, the company reached an agreement in-principle with the IRS Independent Office of Appeals for the
tax years ended December 31, 2013 through 2018. The audit will be closed upon issuance of the final audit report by the IRS.
The company’s federal income tax returns for the tax years ended December 31, 2019 through 2023 are still subject to audit.
The company has unrecognized tax benefits of $79.5 million and $51.4 million as of December 31, 2024 and 2023,
respectively. Unrecognized tax benefits were recorded as a reduction of the deferred tax asset associated with the federal tax
credit carryforwards. Interest and penalties associated with uncertain tax positions are accrued as part of income taxes
F-39
payable. In November 2024, the company reached an agreement in-principle with the IRS Independent Office of Appeals
covering the tax years 2013 through 2018 resulting in an increase to the previously established reserve for unrecognized tax
benefits.
16. COMMITMENTS AND CONTINGENCIES
Lease Expense
The company leases certain facilities, parcels of land, and equipment, with remaining terms ranging from less than one
year to 12.9 years. The land and facility leases include renewal options. The renewal options are included in the lease term
only for those sites or locations in which they are reasonably certain to be renewed. Equipment renewals are not considered
reasonably certain to be exercised as they typically renew with significantly different underlying terms.
The company may sublease certain of its railcars to third parties on a short-term basis. The subleases are classified as
operating leases, with the associated sublease income being recognized on a straight-line basis over the lease term.
The components of lease expense are as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Lease expense
Operating lease expense
$
29,061 $
27,773 $
22,116
Variable lease expense (benefit) (1)
1,075
(97)
1,394
Total lease expense
$
30,136 $
27,676 $
23,510
(1)
Represents amounts incurred in excess of the minimum payments required for a certain building lease and for the handling and unloading of
railcars for a certain land lease, offset by railcar lease abatements provided by the lessor when railcars are out of service during periods of
maintenance or upgrade.
Supplemental cash flow information related to operating leases is as follows (in thousands):
Year Ended December 31,
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases
$
29,568 $
27,275 $
21,459
Right-of-use assets obtained in exchange for lease obligations
Operating leases
25,403
28,471
28,565
Right-of-use assets and lease obligations derecognized due to lease
modifications
Right-of-use assets (1)
2,208
3,428
—
Lease obligations (1)
2,739
3,428
—
(1)
Amounts presented in 2024 are related to the Birmingham Transaction, while amounts in 2023 relate to the Atkinson Transaction. Derecognition
of right-of-use assets and lease obligations for both dispositions is related to railcar operating leases.
Supplemental balance sheet information related to operating leases is as follows:
2024
2023
Weighted average remaining lease term
4.0 years
4.5 years
Weighted average discount rate
5.36%
5.16%
F-40
Aggregate minimum lease payments under the operating lease agreements for future fiscal years as of December 31,
2024 are as follows (in thousands):
Year Ending December 31,
Amount
2025
$
27,822
2026
20,595
2027
16,225
2028
7,685
2029
4,344
Thereafter
5,655
Total
82,326
Less: Present value discount
(8,425)
Lease liabilities
$
73,901
Other Commitments
As of December 31, 2024, the company had contracted future purchases of grain, ethanol, distillers grains, and natural
gas valued at approximately $196.6 million and future commitments for storage and transportation, valued at approximately
$38.9 million.
The company has entered into contracts with Tallgrass High Plains Carbon Storage, LLC and its affiliates, related to the
construction, development and operation of carbon capture and sequestration projects at our three Nebraska plants, which are
expected to be completed in 2025. Payments associated with these contracts are due monthly over a period of twelve years,
commencing after the capture facilities are considered in-service. Amounts due under the contracts are based on the
achievement of certain project milestones and are subject to termination of all or portions of the contracts. Certain of the
future obligations to Tallgrass High Plains Carbon Storage, LLC are secured by a leasehold deed of trust, security agreement
and assignment of rents and leases. As of December 31, 2024, the company had incurred $17.9 million of accumulated
construction costs in relation to these projects, presented as property, plant and equipment on the consolidated balance sheet,
with an equal and offsetting liability presented as other liabilities.
Government Assistance
During the year ended December 31, 2023 and 2022, respectively, the company received relief grants of $3.4 million and
$27.7 million from the USDA related to the Biofuel Producer Program. The grants received were recorded as other income
and the company has no further reporting or other obligations related to the receipt of these grants.
Legal
The company is currently involved in litigation that has arisen in the ordinary course of business, but does not believe
any pending litigation will have a material adverse effect on its financial position, results of operations or cash flows.
17. EMPLOYEE BENEFIT PLANS
The company offers eligible employees a comprehensive employee benefits plan that includes health, dental, vision, life
and accidental death, short-term disability and long-term disability insurance, and flexible spending accounts. The company
also offers a 401(k) plan enabling eligible employees to save for retirement on a tax-deferred basis up to the limits allowed
under the Internal Revenue Code. During 2022, the company increased the employer match from 4% to 6% of eligible
employee contributions for employees with less than 5 years of service, and up to 8% of eligible employee contributions after
5 years of service. Effective January 1, 2025, the company decreased the employer match for employees with 5 years of
service from 8% to 6% of eligible employee contributions. Employee and employer contributions are 100% vested
immediately. Employer contributions to the 401(k) plan for the years ended December 31, 2024, 2023 and 2022 were $4.5
million, $3.9 million and $3.5 million, respectively.
The company contributes to a defined benefit pension plan. Since January 2009, the benefits under the plan were frozen;
however, the company remains obligated to ensure the plan is funded according to its requirements. As of December 31,
2024, the plan’s assets were $4.5 million and liabilities were $5.2 million. At December 31, 2024 and 2023, net liabilities of
F-41
$0.7 million and $1.0 million, respectively, were included in other liabilities on the consolidated balance sheets.
F-42
Corporate
Information
Board of Directors
JAMES D. ANDERSON(2)
Chairman
Chief Executive Officer Molycop
FARHA ASLAM(2)
Managing Partner
Crescent House Capital
STEVE FURCICH
Partner
Tillridge Global Agribusiness Fund
CARL GRASSI(3)
Former Chairman
McDonald Hopkins LLC
EJNAR A. KNUDSEN III
Founder and Chief Executive Officer
AGR Partners
BRIAN PETERSON(2)
President and Chief Executive Officer
Whiskey Creek Enterprises
MARTIN SALINAS JR.(1),(3)
Former Chief Financial Officer
Energy Transfer Partners, LP
PATRICK SWEENEY
Director, Portfolio Manager
Ancora Holdings Group LLC
ALAIN TREUER(1),(3)
Chairman and Chief Executive Officer
Tellac Reuert Partners SA
Chairman
Local Ocean France
KIMBERLY WAGNER(1),(3)
Founder and Managing Partner
TBGD Partners
Member of; (1) Audit Committee, (2)
Compensation Committee (3) Nominating
and Governance Committee
(4) Member of Executive Committee until
new Chief Executive Officer is appointed.
Executive Officers
PHILIP B. BOGGS
Chief Financial Officer
IMRE HAVASI(4)
Senior Vice President - Head of
Trading and Commercial Operations
JAMES F. HERBERT II(4)
Chief Human Resources Officer
MICHELLE S. MAPES(4)
Principal Executive Officer,
Chief Legal & Administration Officer
and Corporate Secretary
CHRIS G. OSOWSKI(4)
Executive Vice President, Operations
& Technology
Corporate Office
1811 Aksarben Drive
Omaha, NE 68106
402.884.8700
www.gpreinc.com
Investor Relations
investor@gpreinc.com
Stock Exchange Listing
The Nasdaq Global Market
Stock Ticker Symbol: GPRE
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Correspondence should be
mailed to:
Computershare
P.O. Box 43006
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Overnight correspondence
should be mailed to:
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150 Royall Street, Suite 101
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Shareholder services:
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Investor CentreTM portal:
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Green Plains Inc. 2024 Annual Report
www.gpreinc.com
Green Plains Inc.
1811 Aksarben Drive
Omaha, NE 68106