UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

FORM 10-Q

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

For the Quarterly Period Ended September 30, ~~2018~~2019

Commission File Number 001-32924

Green Plains Inc.

(Exact name of registrant as specified in its charter)


Iowa	84-1652107
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1811 Aksarben Drive, Omaha, NE 68106	(402) 884-8700
(Address of principal executive offices, including zip code)	(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	GPRE	The Nasdaq Stock Market LLC

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

☒x Yes ☐o No

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

☒

x Yes ☐o No

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


Large accelerated filer ☒ 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐o Yes ☒x No

The number of shares of common stock, par value $0.001 per share, outstanding as of November ~~5, 2018,~~4, 2019, was ~~41,414,396~~35,955,233 shares.

Commonly Used Defined Terms

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

Green Plains Inc., Subsidiaries, and Partners:


Green Plains; the company	Green Plains Inc. and its subsidiaries
BioProcess Algae	BioProcess Algae LLC
~~DKGP~~Fleischmann’s Vinegar	~~DKGP Energy Terminals LLC~~
~~Fleischmann’s Vinegar~~	Fleischmann’s Vinegar Company, Inc.
Green Plains ~~Cattle~~Cattle; GPCC	Green Plains Cattle Company LLC
Green Plains Grain	Green Plains Grain Company LLC
Green Plains Partners; the partnership	Green Plains Partners LP
~~Green Plains Processing~~	~~Green Plains Processing LLC and its subsidiaries~~
Green Plains Trade	Green Plains Trade Group LLC

Accounting Defined Terms:


~~Green Plains Commodity Management~~ASC	~~Green Plains Commodity Management LLC~~

~~Accounting Defined Terms:~~

	Accounting Standards Codification
~~AMT~~Bgy	~~Alternative minimum tax~~Billion gallons per year
~~ASC~~EBITDA	~~Accounting Standards Codification~~
~~EBITDA~~	Earnings before interest, income taxes, depreciation and amortization
EPS	Earnings per share
Exchange Act	Securities Exchange Act of 1934, as amended
~~FASB~~GAAP	~~Financial Accounting Standards Board~~
~~GAAP~~	U.S. Generally Accepted Accounting Principles
LIBOR	London Interbank Offered Rate
LTIP	Long-Term Incentive Plan
R&D Credits	Research and development tax credits
SEC	Securities and Exchange Commission

~~Other~~Industry Defined Terms:


CAFE	Corporate Average Fuel Economy
D.C.	District of Columbia
E10	Gasoline blended with up to 10% ethanol by volume
E15	Gasoline blended with up to 15% ethanol by volume
E85	Gasoline blended with up to 85% ethanol by volume
EIA	U.S. Energy Information Administration
~~EISA~~EPA	~~Energy Independence and Security Act of 2017, as amended~~
~~EPA~~	U.S. Environmental Protection Agency
MmBtu	Million British Thermal Units
Mmg	Million gallons
MTBE	Methyl tertiary-butyl ether
~~RBOB~~RFS II	~~Reformulated blendstock for oxygenate blending~~
~~RFS II~~	Renewable Fuels Standard II
RIN	Renewable identification number
RVO	Renewable volume obligation
~~U.S.~~USDA	~~United States~~
~~USDA~~	U.S. Department of Agriculture

‎

PART 1 – FINANCIAL INFORMATION

Item 1. Financial Statements.

GREEN PLAINS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	September 30, ‎2019		December 31, ‎2018
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	235,537	$	251,681
Restricted cash		18,502		31,603
Accounts receivable, net of allowances of $203 and $147, respectively		64,322		88,501
Income taxes receivable		12,933		12,418
Inventories		250,614		302,600
Prepaid expenses and other		10,578		14,125
Derivative financial instruments		29,569		26,315
Current assets of discontinued operations		-		479,399
Total current assets		622,055		1,206,642
Property and equipment, net of accumulated depreciation ‎and amortization of $469,216 and $418,652, respectively		809,041		815,235
Operating lease right-of-use assets		56,437		-
Goodwill		34,689		34,689
Investment in equity method investees		93,029		29,714
Deferred income taxes		22,578		-
Other assets		54,242		57,092
Noncurrent assets of discontinued operations		-		73,060
Total assets	$	1,692,071	$	2,216,432

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	126,815	$	135,829
Accrued and other liabilities		43,440		52,563
Derivative financial instruments		14,564		7,852
Operating lease current liabilities		16,954		-
Short-term notes payable and other borrowings		149,143		163,751
Current maturities of long-term debt		132,999		54,769
Current liabilities of discontinued operations		-		418,936
Total current liabilities		483,915		833,700
Long-term debt		248,289		298,110
Deferred income taxes		1,903		10,123
Operating lease long-term liabilities		42,142		-
Other liabilities		9,360		11,428
Noncurrent liabilities of discontinued operations		-		82
Total liabilities		785,609		1,153,443

Commitments and contingencies (Note 14)

Stockholders' equity
Common stock, $0.001 par value; 75,000,000 shares authorized; ‎46,914,764 and 46,637,549 shares issued, and 36,519,306 ‎and 41,101,975 shares outstanding, respectively		47		47
Additional paid-in capital		730,808		696,222
Retained earnings		187,899		324,728
Accumulated other comprehensive loss		(11,754)		(16,016)
Treasury stock, 10,395,458 and 5,535,574 shares, respectively		(114,046)		(58,162)
Total Green Plains stockholders' equity		792,954		946,819
Noncontrolling interests		113,508		116,170
Total stockholders' equity		906,462		1,062,989
Total liabilities and stockholders' equity	$	1,692,071	$	2,216,432

September 30,
2018

December 31,
2017

(unaudited)

ASSETS
Current assets

Cash and cash equivalents
$
171,674

$
266,651
Restricted cash

62,797

45,709
Accounts receivable, net of allowances of $206 and $217, respectively

134,950

151,122
Income taxes receivable

13,211

6,413
Inventories

765,198

711,878
Prepaid expenses and other

15,529

17,808
Derivative financial instruments

24,254

6,890
Total current assets

1,187,613

1,206,471
Property and equipment, net of accumulated depreciation
and amortization of $588,336 and $514,585, respectively

1,143,551

1,176,707
Goodwill

182,879

182,879
Other assets

170,791

218,593
Total assets
$
2,684,834

$
2,784,650

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities

Accounts payable
$
155,663

$
205,479
Accrued and other liabilities

47,955

63,886
Derivative financial instruments

41,725

12,884
Income taxes payable

-

9,909
Short-term notes payable and other borrowings

556,566

526,180
Current maturities of long-term debt

65,614

67,923
Total current liabilities

867,523

886,261
Long-term debt

767,177

767,396
Deferred income taxes

21,764

56,801
Other liabilities

14,235

15,056
Total liabilities

1,670,699

1,725,514

Commitments and contingencies (Note 14)

Stockholders' equity

Common stock, $0.001 par value; 75,000,000 shares authorized;
46,746,346 and 46,410,405 shares issued, and 41,420,454
and 41,084,463 shares outstanding, respectively

47

46
Additional paid-in capital

695,143

685,019
Retained earnings

276,082

325,411
Accumulated other comprehensive loss

(17,176)

(13,110)
Treasury stock, 5,325,892 and 5,325,942 shares, respectively

(55,183)

(55,184)
Total Green Plains stockholders' equity

898,913

942,182
Noncontrolling interests

115,222

116,954
Total stockholders' equity

1,014,135

1,059,136
Total liabilities and stockholders' equity
$
2,684,834

$
2,784,650

See accompanying notes to the consolidated financial statements.
‎

GREEN PLAINS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2018		2017		2018		2017		2019		2018		2019		2018
Revenues
Product revenues	$	998,802	$	899,534	$	3,027,678	$	2,670,458	$	631,032	$	787,750	$	1,696,245	$	2,395,877
Service revenues		1,298		1,701		4,546		4,724		1,318		1,298		5,315		4,546
Total revenues		1,000,100		901,235		3,032,224		2,675,182		632,350		789,048		1,701,560		2,400,423

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)		936,384		815,787		2,835,344		2,457,702		632,129		733,080		1,700,481		2,233,914
Operations and maintenance expenses		7,271		8,309		23,564		25,107		6,216		7,271		19,314		23,564
Selling, general and administrative expenses		25,083		28,589		80,817		77,946		18,542		23,215		56,450		75,751
Depreciation and amortization expenses		30,713		27,834		84,010		80,105		17,828		29,266		52,963		80,170
Total costs and expenses		999,451		880,519		3,023,735		2,640,860		674,715		792,832		1,829,208		2,413,399
Operating income		649		20,716		8,489		34,322
Operating loss from continuing operations										(42,365)		(3,784)		(127,648)		(12,976)

Other income (expense)
Interest income		790		383		2,136		1,061		767		745		2,813		2,053
Interest expense		(23,399)		(31,889)		(67,548)		(69,815)		(10,548)		(19,703)		(31,528)		(58,330)
Other, net		(117)		1,444		2,362		2,811		88		133		630		260
Total other expense		(22,726)		(30,062)		(63,050)		(65,943)		(9,693)		(18,825)		(28,085)		(56,017)
Loss before income taxes		(22,077)		(9,346)		(54,561)		(31,621)
Loss from continuing operations before income taxes and income (loss) from equity method investees										(52,058)		(22,609)		(155,733)		(68,993)
Income tax benefit		14,658		48,775		31,438		60,905		12,530		14,973		40,692		34,524
Net income (loss)		(7,419)		39,429		(23,123)		29,284
Income (loss) from equity method investees, net of income taxes										644		(250)		534		(489)
Net loss from continuing operations including noncontrolling interest										(38,884)		(7,886)		(114,507)		(34,958)
Net income from discontinued operations, net of income taxes										3,393		467		966		11,835
Net loss										(35,491)		(7,419)		(113,541)		(23,123)
Net income attributable to noncontrolling interests		5,050		5,035		14,457		14,853		3,479		5,050		13,570		14,457
Net income (loss) attributable to Green Plains	$	(12,469)	$	34,394	$	(37,580)	$	14,431
Net loss attributable to Green Plains									$	(38,970)	$	(12,469)	$	(127,111)	$	(37,580)

Earnings per share:
Net income (loss) attributable to Green Plains - basic	$	(0.31)	$	0.83	$	(0.94)	$	0.36
Net income (loss) attributable to Green Plains - diluted	$	(0.31)	$	0.74	$	(0.94)	$	0.48
Earnings (loss) per share - basic and diluted:
Net loss from continuing operations									$	(1.15)	$	(0.32)	$	(3.28)	$	(1.23)
Net income from discontinued operations										0.09		0.01		0.03		0.29
Net loss attributable to Green Plains									$	(1.06)	$	(0.31)	$	(3.25)	$	(0.94)

Weighted average shares outstanding:
Basic		40,229		41,348		40,189		40,008		36,913		40,229		39,092		40,189
Diluted		40,229		50,647		40,189		50,693		36,913		40,229		39,092		40,189

Cash dividend declared per share	$	0.12	$	0.12	$	0.36	$	0.36

See accompanying notes to the consolidated financial statements.

‎

GREEN PLAINS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited and in thousands)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017

Net income (loss)
$
(7,419)

$
39,429

$
(23,123)

$
29,284
Other comprehensive income (loss), net of tax:

Unrealized losses on derivatives arising during the period, net of tax benefit of $4,314, $4,575, $343 and $5,633, respectively

(14,395)

(7,660)

(1,522)

(9,436)
Reclassification of realized losses (gains) on derivatives, net of tax expense (benefit) of ($420), ($2,650), ($55) and $21, respectively

1,427

4,453

243

(34)
Total other comprehensive loss, net of tax

(12,968)

(3,207)

(1,279)

(9,470)
Comprehensive income (loss)

(20,387)

36,222

(24,402)

19,814
Comprehensive income attributable to noncontrolling interests

5,050

5,035

14,457

14,853
Comprehensive income (loss) attributable to Green Plains
$
(25,437)

$
31,187

$
(38,859)

$
4,961


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2019		2018		2019		2018
Net loss	$	(35,491)	$	(7,419)	$	(113,541)	$	(23,123)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on derivatives arising during the period, net of tax benefit (expense) of ($5,149), $4,314, ($12,953) and $343, respectively		28,095		(14,395)		54,472		(1,522)
Reclassification of realized losses (gains) on derivatives, net of tax expense (benefit) of $13,445, ($420), $9,358 and ($55), respectively		(53,255)		1,427		(39,439)		243
Other comprehensive income (loss), net of tax		(25,160)		(12,968)		15,033		(1,279)
Share of equity method investees other comprehensive loss arising during the period, net of tax benefit of $3,555, $0, $3,555, and $0, respectively		(10,771)		-		(10,771)		-
Total other comprehensive income (loss), net of tax		(35,931)		(12,968)		4,262		(1,279)
Comprehensive loss		(71,422)		(20,387)		(109,279)		(24,402)
Comprehensive income attributable to noncontrolling interests		3,479		5,050		13,570		14,457
Comprehensive loss attributable to Green Plains	$	(74,901)	$	(25,437)	$	(122,849)	$	(38,859)

See accompanying notes to the consolidated financial statements.

‎

GREEN PLAINS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)


	Nine Months Ended September 30,				Nine Months Ended ‎September 30,
	2018		2017		2019		2018
Cash flows from operating activities:
Net income (loss)	$	(23,123)	$	29,284
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net loss from continuing operations including noncontrolling interest					$	(114,507)	$	(34,958)
Net income from discontinued operations, net of income taxes						966		11,835
Net loss						(113,541)		(23,123)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		84,010		80,105		52,963		80,170
Amortization of debt issuance costs and debt discount		11,343		11,222		15,633		10,617
Loss on exchange of 3.25% convertible notes due 2018		-		1,291
Gain on disposal of assets		(2,743)		(2,439)
Write-off of deferred financing fees related to extinguishment of debt		-		9,460
Deferred income taxes		(37,980)		(88,565)		(38,918)		(37,980)
Other noncurrent assets and liabilities		-		18,062
Stock-based compensation		8,726		8,761		7,406		8,726
Undistributed equity loss of affiliates		489		120
Changes in operating assets and liabilities before effects of business combinations:
Income (loss) from equity method investees, net of income taxes						(534)		489
Other						1,245		(152)
Changes in operating assets and liabilities before effects of business combinations and dispositions:
Accounts receivable		18,069		32,267		21,106		24,684
Inventories		53,363		(168,788)		52,400		52,966
Derivative financial instruments		9,843		(12,738)		7,208		(10,395)
Prepaid expenses and other assets		2,184		2,180		3,900		2,137
Accounts payable and accrued liabilities		(68,520)		(34,278)		(22,359)		(78,758)
Current income taxes		31,220		(1,540)		(2,175)		31,220
Other		(2,493)		1,361		(2,167)		(2,539)
Net cash provided by (used in) operating activities - continuing operations						(17,833)		58,062
Net cash provided by operating activities - discontinued operations						17,469		26,326
Net cash provided by (used in) operating activities		84,388		(114,235)		(364)		84,388

Cash flows from investing activities:
Purchases of property and equipment, net		(31,114)		(36,475)		(43,372)		(29,892)
Acquisition of businesses, net of cash acquired		(124,407)		(61,727)
Investments in unconsolidated subsidiaries		(2,446)		(12,033)
Proceeds from sale of discontinued operations, net of cash divested						77,240		-
Proceeds from the sale of assets, net						3,469		-
Contribution to equity method investees						(100)		(2,446)
Other investing activities		7,500		-		-		7,500
Net cash used in investing activities		(150,467)		(110,235)
Net cash provided by (used in) investing activities - continuing operations						37,237		(24,838)
Net cash used in investing activities - discontinued operations						(4,169)		(125,629)
Net cash provided (used in) investing activities						33,068		(150,467)

Cash flows from financing activities:
Proceeds from the issuance of long-term debt		58,700		551,500		180,100		58,700
Payments of principal on long-term debt		(62,537)		(487,450)		(68,235)		(62,537)
Proceeds from short-term borrowings		3,095,927		3,301,630		1,994,777		2,758,767
Payments on short-term borrowings		(3,065,953)		(3,135,347)		(2,070,273)		(2,834,617)
Cash payment for exchange of 3.25% convertible notes due 2018		-		(8,523)
Payments for repurchase of common stock		-		(5,733)		(55,884)		-
Payments of cash dividends and distributions		(30,921)		(29,267)		(26,189)		(30,921)
Payment penalty on early extinguishment of debt		-		(2,881)
Proceeds from disgorgement of shareholder short-swing profits						6,699		-
Payments of loan fees		(3,961)		(15,541)		(5,290)		(3,373)
Payments related to tax withholdings for stock-based compensation		(3,215)		(4,105)		(2,101)		(3,215)
Proceeds from exercise of stock options		150		50		-		150
Net cash provided by (used in) financing activities		(11,810)		164,333
Net cash used in financing activities - continuing operations						(46,396)		(117,046)
Net cash provided by (used in) financing activities - discontinued operations						(50,464)		105,236
Net cash used in financing activities						(96,860)		(11,810)

Net change in cash, cash equivalents and restricted cash		(77,889)		(60,137)		(64,156)		(77,889)
Cash, cash equivalents and restricted cash, beginning of period		312,360		406,791		283,284		289,667
Discontinued operations cash activity included above:
Add: Cash balance included in current assets of discontinued operations at beginning of period						34,911		22,693
Less: Cash balance included in current assets of discontinued operations at end of period						-		(40,461)
Cash, cash equivalents and restricted cash, end of period	$	234,471	$	346,654	$	254,039	$	194,010

Continued on the following page

‎

GREEN PLAINS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited and in thousands)


Continued from the previous page
	Nine Months Ended ‎September 30,
	2019		2018
Reconciliation of total cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	235,537	$	171,674
Restricted cash		18,502		62,797
Discontinued operations cash activity included above:
Less: Cash, cash equivalents and restricted cash balance included in current assets of discontinued operations at end of period		-		(40,461)
Total cash, cash equivalents and restricted cash	$	254,039	$	194,010

Non-cash financing activity:
Modification of 3.25% convertible notes due 2019	$	-	$	4,660
Exchange of common stock held in treasury stock for 3.25% ‎convertible notes due 2018	$	-	$	1

Supplemental investing and financing activities of discontinued operations:
Assets acquired in acquisitions, net of cash	$	-	$	124,525
Less: liabilities assumed		-		(118)
Net assets acquired	$	-	$	124,407

Assets disposed of in sale	$	527,614	$	-
Less: liabilities disposed		(373,846)		-
Net assets disposed	$	153,768	$	-

Supplemental disclosures of cash flow:
Cash paid (refunded) for income taxes	$	640	$	(23,568)
Cash paid for interest of continuing operations	$	21,777	$	49,853
Cash paid for interest of discontinued operations	$	11,556	$	8,444

Continued from the previous page

Nine Months Ended
September 30,

2018

2017
Reconciliation of total cash, cash equivalents and restricted cash:

Cash and cash equivalents
$
171,674

$
261,588
Restricted cash

62,797

85,066
Total cash, cash equivalents and restricted cash
$
234,471

$
346,654

Non-cash financing activity:

Modification of 3.25% convertible notes due 2019
$
4,660

$
-
Exchange of 3.25% convertible notes due 2018 for shares
of common stock
$
-

$
47,743
Exchange of common stock held in treasury stock for 3.25%
convertible notes due 2018
$
1

$
27,356

Supplemental investing and financing activities:

Assets acquired in acquisitions, net of cash
$
124,525

$
62,209
Less: liabilities assumed

(118)

(482)
Net assets acquired
$
124,407

$
61,727

Supplemental disclosures of cash flow:

Cash paid (received) for income taxes
$
(23,568)

$
2,062
Cash paid for interest
$
58,297

$
39,984

See accompanying notes to the consolidated financial statements.

‎

GREEN PLAINS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~(unaudited)~~

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

References to the Company

References to “Green Plains” or the “company” in the consolidated financial statements and in these notes to the consolidated financial statements refer to Green Plains Inc., an Iowa corporation, and its subsidiaries.

Consolidated Financial Statements

The consolidated financial statements include the company’s accounts and all significant intercompany balances and transactions are eliminated. Unconsolidated entities are included in the financial statements on an equity basis. ~~As of September 30, 2018, the~~The company owns a ~~62.4%~~49.1% limited partner interest and a 2.0% general partner interest in Green Plains Partners LP. Public investors own the remaining ~~35.6%~~48.9% limited partner interest in the partnership. The company determined that the limited partners in the partnership with equity at risk lack the power, through voting rights or similar rights, to direct the activities that most significantly impact partnership’s economic performance; therefore, the partnership is considered a variable interest entity. The company, through its ownership of the general partner interest in the partnership, has the power to direct the activities that most significantly affect economic performance and is obligated to absorb losses and has the right to receive benefits that could be significant to the partnership. Therefore, the company is considered the primary beneficiary and consolidates the partnership in the company’s financial statements. The assets of the partnership cannot be used by the company for general corporate purposes. The partnership’s consolidated total assets as of September 30, ~~2018,~~2019 and December 31, ~~2017,~~2018, excluding intercompany balances, ~~were $71.5~~are $102.5 million and ~~$74.9~~$67.3 million, respectively, and primarily ~~consisted~~consist of property and equipment, operating lease right-of-use assets and goodwill. The partnership’s consolidated total liabilities as of September 30, ~~2018,~~2019 and December 31, ~~2017,~~2018, excluding intercompany balances, ~~were $152.7~~are $194.3 million and ~~$153.0~~$152.9 million, respectively, which primarily ~~consisted~~consist of long-term debt as discussed in Note 9 – Debt. and operating lease liabilities. The liabilities recognized as a result of consolidating the partnership do not represent additional claims on our general assets.

On September 9, 2019, Green Plains, TGAM Agribusiness Fund Holdings-B LP (“TGAM”) and StepStone Atlantic Fund, L.P. (“StepStone”) announced the formation of a joint venture. Such parties entered into the Second Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”) of Green Plains Cattle Company LLC (“GPCC”) on September 6, 2019, effective as of September 1, 2019. GPCC was previously a wholly owned subsidiary of Green Plains. Green Plains also entered into a Securities Purchase Agreement with TGAM and StepStone, whereby TGAM and StepStone purchased an aggregate of 50% of the membership interests of GPCC from Green Plains. After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. Under this method, the investment is recorded at the acquisition cost plus the company’s share of equity in undistributed earnings or losses since acquisition and the company’s share of equity method investees other comprehensive income arising during the period, reduced by distributions received and the amortization of excess net investment. The company recognizes this investment on a separate line item in the consolidated balance sheet and recognizes its proportionate share of earnings on a separate line item in the consolidated statement of operations. The company does not consolidate any part of the assets or liabilities or operating results of its equity method investees. Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”) to be presented as discontinued operations. As such, GPCC results prior to its disposition are classified as discontinued operations in current and prior period consolidated financial statements. See Note 3 - Acquisitions, Dispositions and Discontinued Operations for further details.

The company also owns a 90.0% interest in BioProcess Algae, a joint venture formed in 2008, and consolidates their results in its consolidated financial statements.

The accompanying unaudited consolidated financial statements are prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Because they do not include all of the information and notes required by GAAP, the consolidated financial statements should be read in conjunction with the company’s annual report on Form 10-K for the year ended December 31, ~~2017.~~2018, as filed with the SEC on February 20, 2019.

The unaudited financial information reflects adjustments, which are, in the opinion of management, necessary for a fair presentation of results of operations, financial position and cash flows for the periods presented. The adjustments are normal

and recurring in nature, unless otherwise noted. Interim period results are not necessarily indicative of the results to be expected for the entire year.

Reclassifications

Certain prior year amounts were reclassified to conform to the current year ~~presentation.~~presentation, including the discontinued operations of GPCC. These reclassifications ~~did not affect~~affected total revenues, costs and ~~expenses, net income (loss) or stockholders’ equity.~~expenses.

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. Key accounting policies, including but not limited to those relating to revenue recognition, depreciation of property and equipment, carrying value of intangible assets, operating leases, impairment of long-lived assets and goodwill, derivative financial instruments, accounting for income taxes and assets acquired and liabilities assumed in acquisitions, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements.

Description of Business

The company operates within ~~four~~4 business segments: (1) ethanol production, which includes the production of ethanol, ~~and~~ distillers grains and ~~recovery of~~ corn oil, (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, corn oil, natural gas and other commodities, (3) food and ingredients, which includes ~~cattle feeding, vinegar production and~~ food-grade corn oil ~~operations~~ and vinegar production until the sale of Fleischmann’s Vinegar during the fourth quarter of 2018 and (4) partnership, which includes fuel storage and transportation services.

Cash and Cash Equivalents

Cash and cash equivalents includes bank deposits as well as short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash

The company has restricted cash, which can only be used for funding letters of credit or for payment towards a revolving credit agreement. Restricted cash also includes cash margins and securities pledged to commodity exchange ~~clearinghouses.~~clearinghouses and at times, funds in escrow related to acquisition and disposition activities. To the degree these segregated balances are cash and cash equivalents, they are considered restricted cash on the consolidated statements of cash flows.

Revenue Recognition

The company recognizes revenue ~~at the point in time when the product or service is transferred to the customer.~~

~~Sales of ethanol, distillers grains, 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. 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, 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. Energy trading transactions are reported net as a component of revenue. ~~All other transactions are reported~~Revenues include net ~~as either a component of revenue~~gains or losses

from derivatives related to products sold while cost of goods sold ~~depending on their position as a gain~~includes net gains or ~~loss.~~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, including agricultural commodities, ~~cattle and vinegar,~~ are recognized when control of the product is transferred to the customer, which depends on the agreed upon shipment or delivery terms. Revenues related to grain merchandising are presented gross and include shipping and handling, which is also a component of cost of goods sold. Revenues from grain storage are recognized when services are rendered.

A substantial portion of the partnership revenues are derived from fixed-fee commercial agreements for storage, terminal or transportation services. The partnership recognizes revenue upon transfer of control of product from its storage tanks and fuel terminals, when railcar volumetric capacity is provided, and as truck transportation services are performed. To the extent shortfalls associated with minimum volume commitments in the previous four quarters continue to exist, volumes in excess of the minimum volume commitment are applied to those shortfalls. Remaining excess volumes generating operating lease revenue are recognized as incurred.

Shipping and Handling Costs

~~We account~~The company accounts for shipping and handling activities related to contracts with customers as costs to fulfill ~~our~~its promise to transfer the associated products. Accordingly, ~~we record~~the company records customer payments associated with shipping and handling costs as a component of revenue, and ~~classify~~classifies such costs as a component of cost of goods sold.

Cost of Goods Sold

Cost of goods sold includes direct labor, materials, shipping and plant overhead costs. Direct labor includes all compensation and related benefits of non-management personnel involved in ethanol production and vinegar production ~~and cattle feeding operations.~~until the sale of Fleischmann’s Vinegar during the fourth quarter of 2018. Grain purchasing and receiving costs, excluding labor costs for grain buyers and scale operators, are also

included in cost of goods sold. Materials include the cost of corn feedstock, denaturant, and process ~~chemicals, cattle and veterinary supplies.~~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. Plant overhead consists primarily of plant ~~and feedlot~~ utilities, repairs and maintenance ~~feedlot expenses~~ and outbound freight charges. Shipping costs incurred by the company, including railcar costs, are also reflected in cost of goods sold.

The company uses exchange-traded futures and options contracts and forward purchase and ~~sales~~sale contracts to attempt to minimize the effect of price changes on ethanol, grain and natural ~~gas and cattle inventories.~~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 differences, primarily in transportation, between the exchange-traded market and local market where the terms of the contract is based. Changes in forward purchase contracts and exchange-traded futures and options contracts are recognized as a component of cost of goods sold.

Operations and Maintenance Expenses

In the partnership segment, transportation expenses represent the primary component of operations and maintenance expenses. Transportation expenses include railcar leases, freight and shipping of the company’s ethanol and co-products, as well as costs incurred storing ethanol at destination terminals.

Derivative Financial Instruments

The company uses various derivative financial instruments, including exchange-traded futures and exchange-traded and over-the-counter options contracts, to attempt to minimize risk and the effect of commodity price changes including but not limited to, corn, ethanol, ~~cattle,~~ natural gas and crude oil. The company monitors and manages this exposure as part of its overall risk management policy to reduce the adverse effect market volatility may have on its operating results. The company may hedge these commodities as one way to mitigate risk; however, there may be situations when these hedging activities themselves result in losses.

By using derivatives to hedge exposures to changes in commodity prices, the company is exposed to credit and market risk. The company’s exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the

terms of the derivative contract. The company minimizes its credit risk by entering into transactions with high quality counterparties, limiting the amount of financial exposure it has with each counterparty and monitoring their financial condition. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices or interest rates. The company manages market risk by incorporating parameters to monitor exposure within its risk management strategy, which limits the types of derivative instruments and strategies the company can use and the degree of market risk it can take using derivative instruments.

The company evaluates its physical delivery contracts to determine if they qualify for normal purchase or sale exemptions which are expected to be used or sold over a reasonable period in the normal course of business. Contracts that do not meet the normal purchase or sale criteria are recorded at fair value. Changes in fair value are recorded in operating income unless the contracts qualify for, and the company elects, cash flow hedge accounting treatment.

Certain qualifying derivatives related to ethanol production and agribusiness and energy services ~~and food and ingredients segments~~ are designated as cash flow hedges. The company evaluates the derivative instrument to ascertain its effectiveness prior to entering into cash flow hedges. 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. When it becomes probable a forecasted transaction will not occur, the cash flow hedge treatment is discontinued, which affects earnings. These derivative financial instruments are recognized in current assets or other current liabilities at fair value.

At times, the company hedges its exposure to changes in 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. Ineffectiveness of the hedges is recognized in the current period to the extent the change in fair value of the inventory is not offset by the change in fair value of the derivative.

Investments in Equity Method Investees

The company 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’s share of equity method investees other comprehensive income arising during the period is included in accumulated other comprehensive loss in the consolidated balance sheet.

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 when 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.

Discontinued Operations

In determining whether a disposal group should be presented as discontinued operations, the company makes a determination of whether such a group being disposed of comprises a component of the entity, or a group of components of the entity, that represents a strategic shift that has, or will have, a major effect on the company's operations and financial results. If these determinations are made affirmatively, the results of operations of the group being disposed of are aggregated for separate presentation apart from the continuing operations of the company for all periods presented in the consolidated financial statements. General corporate overhead is not allocated to discontinued operations.

Net income from discontinued operations, net of income taxes, relates to the operations of GPCC, which was previously a wholly owned subsidiary of Green Plains until the formation of the GPCC joint venture and partial sale during the third quarter of 2019. The assets and liabilities of GPCC have been reclassified as assets and liabilities of discontinued operations

1011

in the prior year. All assets and liabilities of GPCC were disposed of during the three months ended September 30, 2019. See Note 3 - Acquisitions, Dispositions and Discontinued Operations for further details.

The company entered into a shared service agreement whereby they will continue to provide certain administrative services to GPCC and will receive $400 thousand on a quarterly basis through September 1, 2024, with the option for automatic renewal for successive one year periods thereafter and the quarterly fee subject to adjustments annually based on services rendered or market rates. The company will continue to sell distillers grains and corn to GPCC, and will recognize these sales and related cost of goods in continuing operations within their consolidated results, whereas previously these were eliminated as intercompany transactions.

Recent Accounting Pronouncements

Effective January 1, ~~2018,~~2019, the company adopted the amended guidance in ASC ~~Topic 606,~~ ~~Revenue from Contracts with Customers.~~842, Leases. Please refer to Note 214 – ~~Revenue~~Commitments and Contingencies for further details.

~~Effective January 1, 2018, the company adopted the amended guidance in ASC Topic 230,~~ ~~Statement of Cash Flows: Restricted Cash~~, which requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amended guidance was applied retrospectively. As a result, net cash used in operating activities for the nine months ended September 30, 2017, was adjusted to exclude the change in restricted cash and decreased the previously reported balance by $8.0 million. Net cash provided by financing activities for the nine months ended September 30, 2017, was adjusted to exclude the change in restricted cash and decreased the previously reported balance by $25.5 million.

~~Effective January 1, 2018, the company adopted the amended guidance in ASC Topic 740,~~ ~~Income Taxes: Intra-Entity Transfers of Assets other than Inventory~~, which requires the recognition of current and deferred income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amended guidance is required on a modified retrospective basis, with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. The adoption of the guidance did not have an impact to the financial statements.

~~Effective January 1, 2018, the company adopted the amended guidance in ASC Topic 805,~~ ~~Business Combinations: Clarifying the Definition of a Business~~, which clarifies the definition of a business and provides guidance to assist companies and other reporting organizations evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amended guidance will be applied prospectively.

~~Effective January 1, 2018, the company early adopted the amended guidance in ASC Topic 350,~~ ~~Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment~~, which simplifies the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The annual goodwill impairment test will be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge equal to the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit, would be recognized. The amended guidance will be applied prospectively, and used when the annual impairment test is performed in the current year. The company does not believe the new guidance will have a material impact on the consolidated financial statements.

~~Effective January 1, 2018, the company early adopted the amended guidance in ASC Topic 220,~~ ~~Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,~~ which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendment eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act and is intended to improve the usefulness of information reported. As a result, the company recorded a $2.8 million reclassification from accumulated other comprehensive income to retained earnings during the first quarter of 2018. It is the company’s policy to release income tax effects from accumulated other comprehensive income using the portfolio approach.

~~Effective January 1, 2019, the company will adopt the amended guidance in ASC Topic 842,~~ ~~Leases~~, which aims to make leasing activities more transparent and comparable, requiring substantially all leases to be recognized by lessees on the balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. The new standard is effective for fiscal years and interim periods within those years, beginning after December 15, 2018. The standard requires a modified retrospective transition approach and allows for early adoption. In July 2018, the FASB issued Accounting Standards Update, ~~Leases (Topic 842): Targeted Improvements~~, which provides an option to apply the transition provisions of the new standard at adoption date instead of the earliest comparative period presented in the financial statements. The company will elect to use this optional transition method.

The company has established an implementation team which continues to review current accounting policies, internal controls, processes, and disclosures that will change as a result of adopting the new standard. The company has gathered information on existing leases to obtain a complete population of leases upon adoption, and has implemented a lease accounting system, which will assist in delivering the required accounting changes and disclosures. The new standard will significantly increase right-of-use assets and lease liabilities on the company’s consolidated balance sheet, primarily due to operating leases that are currently not recognized on the balance sheet. In addition, it will also require expanded disclosures

in the company’s consolidated financial statements. The company will complete its assessment of the impact of the new guidance on its consolidated financial statements during the fourth quarter of 2018.

2. REVENUE

~~Adoption of ASC Topic 606~~

~~On January 1, 2018, the company adopted the amended guidance in ASC Topic 606,~~ ~~Revenue from Contracts with Customers~~, and all related amendments (“new revenue standard”) and applied it to all contracts using the modified retrospective transition method. There were no adjustments to the consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard. As such, comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. In addition, there was no impact of adoption on the consolidated statements of operations or balance sheets for the nine months ended September 30, 2018.

Revenue Recognition

Revenue is 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. 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 ~~table disaggregates~~tables disaggregate revenue by major source for the three and nine months ended September 30, 2019 and 2018 ~~(in~~ excluding amounts related to discontinued operations (in thousands):


	Three Months Ended September 30, 2018													Three Months Ended September 30, 2019⁽¹⁾
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total			Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC Topic 606:
Revenues from contracts with customers under ASC 606:
Ethanol	$	291	$	-	$	-	$	-	$	-	$	291	$	-	$	-	$	-	$	-	$	-	$	-
Distillers grains		54,687		-		-		-		-		54,687		16,455		-		-		-		-		16,455
Cattle and vinegar		-		-		259,224		-		-		259,224
Service revenues		-		-		-		983		-		983		-		-		-		1,275		-		1,275
Other		238		680		-		-		-		918		127		895		-		-		-		1,022
Intersegment revenues		721		23		38		2,597		(3,379)		-		24		-		-		2,046		(2,070)		-
Total revenues from contracts with customers		55,937		703		259,262		3,580		(3,379)		316,103		16,606		895		-		3,321		(2,070)		18,752
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1):
Revenues from contracts accounted for as derivatives under ASC 815 ⁽²⁾:
Ethanol		440,333		93,166		-		-		-		533,499		389,847		111,454		-		-		-		501,301
Distillers grains		56,802		44,142		-		-		-		100,944		62,698		6,077		-		-		-		68,775
Corn oil		17,088		10,275		4,411		-		-		31,774		14,308		5,509		-		-		-		19,817
Grain		30		21,972		-		-		-		22,002		2		19,056		-		-		-		19,058
Cattle and vinegar		-		-		(12,522)		-		-		(12,522)
Other		3,930		4,055		-		-		-		7,985		945		3,659		-		-		-		4,604
Intersegment revenues		2,392		12,669		-		-		(15,061)		-		-		7,293		-		-		(7,293)		-
Total revenues from contracts accounted for as derivatives		520,575		186,279		(8,111)		-		(15,061)		683,682		467,800		153,048		-		-		(7,293)		613,555
Leasing revenues under ASC Topic 840 (2)		-		-		-		22,190		(21,875)		315
Leasing revenues under ASC 842 ⁽³⁾:														-		-		-		16,833		(16,790)		43
Total Revenues	$	576,512	$	186,982	$	251,151	$	25,770	$	(40,315)	$	1,000,100	$	484,406	$	153,943	$	-	$	20,154	$	(26,153)	$	632,350

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	Nine Months Ended September 30, 2019⁽¹⁾
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	620	$	-	$	-	$	-	$	-	$	620
Distillers grains		47,860		-		-		-		-		47,860
Service revenues		-		-		-		4,966		-		4,966
Other		2,135		1,515		-		-		-		3,650
Intersegment revenues		75		-		-		5,267		(5,342)		-
Total revenues from contracts with customers		50,690		1,515		-		10,233		(5,342)		57,096
Revenues from contracts accounted for as derivatives under ASC 815 ⁽²⁾:
Ethanol		946,390		324,756		-		-		-		1,271,146
Distillers grains		165,436		32,165		-		-		-		197,601
Corn oil		35,915		22,943		1,451		-		-		60,309
Grain		138		59,140		-		-		-		59,278
Other		7,613		48,168		-		-		-		55,781
Intersegment revenues		-		19,432		-		-		(19,432)		-
Total revenues from contracts accounted for as derivatives		1,155,492		506,604		1,451		-		(19,432)		1,644,115
Leasing revenues under ASC 842 ⁽³⁾:		-		-		-		51,833		(51,484)		349
Total Revenues	$	1,206,182	$	508,119	$	1,451	$	62,066	$	(76,258)	$	1,701,560


	Three Months Ended September 30, 2018⁽¹⁾
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	291	$	-	$	-	$	-	$	-	$	291
Distillers grains		55,370		-		-		-		-		55,370
Vinegar		-		-		29,032		-		-		29,032
Service revenues		-		-		-		983		-		983
Other		238		680		-		-		-		918
Intersegment revenues		37		23		-		2,597		(2,657)		-
Total revenues from contracts with customers		55,936		703		29,032		3,580		(2,657)		86,594
Revenues from contracts accounted for as derivatives under ASC 815 ⁽²⁾:
Ethanol		440,333		93,166		-		-		-		533,499
Distillers grains		59,195		45,645		-		-		-		104,840
Corn oil		17,088		10,275		4,411		-		-		31,774
Grain		30		23,921		-		-		-		23,951
Other		3,930		4,145		-		-		-		8,075
Intersegment revenues		-		9,127		-		-		(9,127)		-
Total revenues from contracts accounted for as derivatives		520,576		186,279		4,411		-		(9,127)		702,139
Leasing revenues under ASC 840 ⁽³⁾:		-		-		-		22,190		(21,875)		315
Total Revenues	$	576,512	$	186,982	$	33,443	$	25,770	$	(33,659)	$	789,048

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	Nine Months Ended September 30, 2018													Nine Months Ended September 30, 2018⁽¹⁾
	Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total		Ethanol Production		Agribusiness & Energy Services		Food & Ingredients		Partnership		Eliminations		Total
Revenues:
Revenues from contracts with customers under ASC 606:
Ethanol	$	3,391	$	-	$	-	$	-	$	-	$	3,391	$	3,391	$	-	$	-	$	-	$	-	$	3,391
Distillers grains		174,589		-		-		-		-		174,589		176,690		-		-		-		-		176,690
Cattle and vinegar		-		-		748,699		-		-		748,699
Vinegar														-		-		90,229		-		-		90,229
Service revenues		-		-		-		3,430		-		3,430		-		-		-		3,430		-		3,430
Other		1,570		2,012		-		-		-		3,582		1,570		2,012		-		-		-		3,582
Intersegment revenues		2,258		23		118		7,286		(9,685)		-		157		23		-		7,286		(7,466)		-
Total revenues from contracts with customers		181,808		2,035		748,817		10,716		(9,685)		933,691		181,808		2,035		90,229		10,716		(7,466)		277,322
Revenues from contracts accounted for as derivatives under ASC Topic 815 (1):
Revenues from contracts accounted for as derivatives under ASC 815 ⁽²⁾:
Ethanol		1,333,989		321,824		-		-		-		1,655,813		1,333,989		321,824		-		-		-		1,655,813
Distillers grains		147,203		98,060		-		-		-		245,263		154,230		101,678		-		-		-		255,908
Corn oil		52,690		22,433		12,048		-		-		87,171		52,690		22,433		12,048		-		-		87,171
Grain		500		59,101		-		-		-		59,601		500		67,085		-		-		-		67,585
Cattle and vinegar		-		-		(5,638)		-		-		(5,638)
Other		12,486		42,721		-		-		-		55,207		12,486		43,022		-		-		-		55,508
Intersegment revenues		7,027		38,226		-		-		(45,253)		-		-		26,323		-		-		(26,323)		-
Total revenues from contracts accounted for as derivatives		1,553,895		582,365		6,410		-		(45,253)		2,097,417		1,553,895		582,365		12,048		-		(26,323)		2,121,985
Leasing revenues under ASC 840 (2)		-		-		-		66,779		(65,663)		1,116
Leasing revenues under ASC 840 ⁽³⁾:														-		-		-		66,779		(65,663)		1,116
Total Revenues	$	1,735,703	$	584,400	$	755,227	$	77,495	$	(120,601)	$	3,032,224	$	1,735,703	$	584,400	$	102,277	$	77,495	$	(99,452)	$	2,400,423

(1)Revenues include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation. These revenue transactions are now presented on a gross basis in product revenues. These revenue transactions total $5.5 million and $14.5 million for the three and nine months ended September 30, 2019, respectively, and $6.7 million and $21.1 million for the three and nine months ended September 30, 2018, respectively.

(2)Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC 606, Revenue from Contracts with Customers (ASC 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC 606 as required by ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

(3)Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, and are accounted for under ASC 842, Leases for 2019 and ASC 840, Leases for 2018.

~~(1)~~

~~Revenues from contracts accounted for as derivatives represent physically settled derivative sales that are outside the scope of ASC Topic 606,~~ ~~Revenue from Contracts with Customers~~ ~~(ASC Topic 606), where the company recognizes revenue when control of the inventory is transferred within the meaning of ASC Topic 606 as required by ASC Topic 610-20,~~ ~~Gains and Losses from the Derecognition of Nonfinancial Assets~~.

~~(2)~~

~~Leasing revenues do not represent revenues recognized from contracts with customers under ASC Topic 606, and continue to be accounted for under ASC Topic 840,~~ ~~Leases~~.

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 and lease agreements. Unearned revenue from service agreements, which represents a contract liability, is recorded for fees that have been charged to the customer prior to the completion of performance ~~obligations, and~~obligations. Unearned revenue is generally recognized in the subsequent ~~quarter.~~ quarter and is not material to the company. The company expects to recognize all of the unearned revenue associated with service agreements as of September 30, ~~2018,~~2019, in the subsequent quarter when the inventory is withdrawn from the partnership’s tank storage.

~~Practical Expedients~~

Under the new revenue standard, companies may elect various practical expedients upon adoption. As a result, the company elected to recognize the cost for shipping and handling activities that occur after the customer obtains control of the promised goods as fulfillment activities and not when performance obligations are met. The company also elected to exclude sales taxes from transaction prices.

3. ACQUISITIONS, DISPOSITIONS AND DISCONTINUED OPERATIONS

ACQUISITIONS

Acquisition of Cattle Feeding Operations – Bartlett Cattle Company, L.P.

On August 1, 2018, the company acquired ~~two~~2 cattle-feeding operations from Bartlett Cattle Company, L.P. for $16.2 million, plus working capital of approximately $106.6 million primarily consisting of work-in-process inventory. The transaction included the feed yards located in Sublette, Kansas and Tulia, Texas, which added combined feedlot capacity of 97,000 head of cattle to the company’s operations. The transaction was financed using cash on hand and proceeds from the

Green Plains Cattle senior secured asset-based revolving credit facility. There were no material acquisition costs recorded for the acquisition.

~~The following is a summary of the preliminary purchase price of assets acquired and liabilities assumed (in thousands):~~


~~Amounts of Identifiable Assets Acquired~~ ~~and Liabilities Assumed~~
~~Accounts receivable~~		$	~~1,897~~
~~Inventory~~			~~104,809~~
~~Property and equipment, net~~			~~16,190~~

~~Current liabilities~~			~~(118)~~
	~~Total identifiable net assets~~	$	~~122,778~~

~~The amounts above reflect a working capital payment by the company of $0.9 million made during the third quarter of 2018.~~

~~Acquisition of Cattle Feeding Operations – Cargill Cattle Feeders, LLC~~

On May 16, 2017, the company acquired two cattle-feeding operations from Cargill Cattle Feeders, LLC for $59.3 million, including certain working capital adjustments. The transaction included the feed yards located in Leoti, Kansas and Eckley, Colorado, which added combined feedlot capacity of 155,000 head of cattle to the company’s operations. The transaction was financed using cash on hand. ~~There were no material acquisition costs recorded for the acquisition.~~

As part of the transaction, the company also entered into a long-term cattle supply agreement with Cargill Meat Solutions Corporation. Under the cattle supply agreement, all cattle placed in the Leoti and Eckley feedlots are sold exclusively to Cargill Meat Solutions under an agreed upon pricing arrangement.

The following is a summary of the assets acquired and liabilities assumed (in thousands):


~~Amounts of Identifiable Assets Acquired~~ ~~and Liabilities Assumed~~
~~Inventory~~		$	~~22,450~~
~~Prepaid expenses and other~~			52
~~Property and equipment, net~~			~~36,960~~

~~Current liabilities~~			~~(180)~~
	~~Total identifiable net assets~~	$	~~59,282~~


Amounts of Identifiable Assets Acquired and Liabilities Assumed
Accounts receivable		$	1,897
Inventory			104,809
Property and equipment, net			16,190

Current liabilities			(118)
	Total identifiable net assets	$	122,778

The amounts above reflect the final purchase price allocation, which included working capital true-up payments by the company of ~~$1.6~~$0.9 million made during the ~~first half~~third quarter of 2018. After the disposition of GPCC, the assets and liabilities of the acquired feedlots were reclassified as discontinued operations. See Disposition of Green Plains Cattle Company LLC described below.

DISPOSITIONS

Disposition of Fleischmann’s Vinegar

On November 27, 2018, the company and Green Plains II LLC, an indirect wholly-owned subsidiary of the company, completed the sale of Fleischmann’s Vinegar Company, Inc. to Kerry Holding Co. (“Kerry”). The company received as net consideration from Kerry $354.0 million in cash and restricted cash, including net working capital adjustments. The divested assets were reported within the company’s food and ingredients segment. The company recorded a pre-tax gain on the sale of Fleischmann’s Vinegar of $58.2 million, including offsetting related transaction costs of $7.4 million within the corporate segment.

The assets and liabilities of Fleischmann’s Vinegar at closing on November 27, 2018 were as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Cash		$	2,107
Accounts receivable, net			16,142
Inventory			15,167
Prepaid expenses and other			853
Property and equipment			64,552
Other assets			79,389

Current liabilities			(8,837)
Deferred tax liabilities			(26,617)
	Total identifiable net assets		142,756

Goodwill			142,002
	Net assets disposed	$	284,758

The amounts above reflect the preliminary working capital true-up payments made to and received from Kerry, including a working capital payment made to and received from Kerry of $0.3 million and $0.3 million during the first and third quarters of 2019, respectively.

Disposition of Bluffton, Lakota and Riga Ethanol Plants

On November 15, 2018, the company completed the sale of 3 ethanol plants located in Bluffton, Indiana, Lakota, Iowa, and Riga, Michigan, and certain related assets from subsidiaries, to Valero Renewable Fuels Company, LLC (“Valero”) for the sale price of $323.2 million, including net working capital and other adjustments. Correspondingly, the partnership’s storage assets located adjacent to such plants were sold to Green Plains Inc. for $120.9 million. The company received as consideration from Valero approximately $323.2 million, while the partnership received as consideration from the company 8.7 million partnership units and a portion of the general partner interest equating to 0.2 million equivalent limited

partner units to maintain the general partner’s 2% interest. In addition, the partnership also received additional consideration of approximately $2.7 million from Valero for the assignment of certain 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 pre-tax gain on the sale of the 3 ethanol plants of $92.2 million, of which $89.5 million was recorded within the corporate segment and $2.7 million was recorded within the partnership segment, including offsetting transaction costs of $4.2 million, of which $3.7 million were recorded within the corporate segment and $0.5 million were recorded within the partnership segment.

The assets and liabilities of the Bluffton, Lakota and Riga ethanol plants at closing on November 15, 2018 are as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Inventory		$	36,812
Prepaid expenses and other			189
Property and equipment			184,970
Other assets			1,717

Current liabilities			(746)
Other liabilities			(4,706)
	Total identifiable net assets		218,236

Goodwill			6,188
	Net assets disposed	$	224,424

The amounts above reflect the final working capital true-up payments by Valero of $3.4 million received during the first quarter of 2019.

Disposition of Green Plains Cattle Company LLC

On September 9, 2019, Green Plains, TGAM and StepStone announced the formation of a joint venture. Such parties entered into the LLC Agreement, effective as of September 1, 2019. GPCC was previously a wholly owned subsidiary of Green Plains. Green Plains also entered into a Securities Purchase Agreement with TGAM and StepStone, whereby TGAM and StepStone purchased an aggregate of 50% of the membership interests of GPCC from Green Plains for approximately $77.2 million in cash, plus post-closing adjustments. There was 0 gain or loss recorded as part of this transaction. The LLC Agreement contains certain earn-out or bonus provisions to be paid by or received from GPCC if certain EBITDA thresholds are met. The company does not believe these are reasonably estimable and therefore has not recorded these amounts in the consolidated financial statements.

Under the LLC Agreement, Green Plains has certain rights and obligations, including but not limited to, the right or obligation: (i) to designate two Managers to the Board of Managers of GPCC (the “Board”), or in the event the size of the Board is increased, the number of Managers equal to two-fifths of the Board, rounded up, and (ii) to fund additional capital contributions in accordance with their percentage interest upon mutual agreement by Green Plains, TGAM and StepStone. Additionally, TGAM and StepStone both have the right or obligation to designate one Manager, or in the event the size of the Board is increased, the number of Managers equal to one-fifths of the Board, rounded up. Each Manager serving on the Board shall have one vote and a majority of the Managers serving on the Board shall constitute a quorum for the transaction of business of the Board. Green Plains’ allocation under the LLC Agreement will be subject to certain adjustments.

‎

The assets and liabilities of the GPCC at closing on September 1, 2019 are as follows (in thousands):


Amounts of Identifiable Assets Disposed and Liabilities Relinquished
Cash		$	2
Accounts receivable, net			17,920
Inventory			387,534
Derivative financial instruments			48,189
Property and equipment			71,678
Other assets			2,291

Current liabilities			(49,297)
Short-term notes payable and other borrowings			(38)
Current maturities of long-term debt			(324,028)
Long-term debt			(80)
Other liabilities			(403)
	Total identifiable net assets disposed	$	153,768

DISCONTINUED OPERATIONS

After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20. As such, GPCC results for the three and nine months ended September 30, 2019 and 2018 are classified as discontinued operations. Furthermore, the related assets and liabilities of GPCC have been presented as discontinued operations on the December 31, 2018 consolidated balance sheet. Financial results of GPCC were previously recorded within the food and ingredients segment.

Assets and Liabilities in the Consolidated Balance Sheet Attributable to Discontinued Operations

The following table presents assets and liabilities associated with our discontinued operations.


	December 31, ‎2018
Assets
Cash and cash equivalents	$	2
Restricted cash		34,909
Accounts receivable, net of allowances		11,860
Inventories		432,283
Prepaid expenses and other		345
Current assets of discontinued operations	$	479,399

Property and equipment, net of accumulated depreciation and amortization	$	71,341
Other assets		1,719
Noncurrent assets of discontinued operations	$	73,060

Liabilities
Accounts payable	$	21,072
Accrued and other liabilities		6,410
Derivative financial instruments		16,924
Short-term notes payable and other borrowings		374,492
Current maturities of long-term debt		38
Current liabilities of discontinued operations	$	418,936

Long-term debt	$	80
Other liabilities		2
Noncurrent liabilities of discontinued operations	$	82

‎

Summarized Results of Discontinued Operations

The following table presents the results of our discontinued operations for the periods presented. GPCC was disposed of on September 1, 2019, as such operational results through August 31, 2019 are included in the fiscal year 2019 amounts presented below.


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2019⁽¹⁾		2018⁽¹⁾		2019⁽¹⁾		2018 ⁽¹⁾

Product revenues	$	160,113	$	217,708	$	638,122	$	652,950

Costs and expenses
Cost of goods sold (excluding depreciation and amortization expenses reflected below)		150,214		209,922		614,671		622,461
Selling, general and administrative expenses		1,472		1,906		5,931		5,184
Depreciation and amortization expenses		1,004		1,447		4,199		3,840
Total costs and expenses		152,690		213,275		624,801		631,485
Operating income		7,423		4,433		13,321		21,465

Other income (expense)
Interest income		42		45		182		83
Interest expense		(3,001)		(3,696)		(12,417)		(9,218)
Other, net		-		-		-		2,591
Total other expense		(2,959)		(3,651)		(12,235)		(6,544)
Income before income taxes		4,464		782		1,086		14,921
Income tax expense		(1,071)		(315)		(120)		(3,086)
Net income	$	3,393	$	467	$	966	$	11,835

(1)Product revenues, costs of goods sold and selling, general and administrative expenses include certain revenue and expense items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation. These revenue and costs of goods sold transactions total $5.5 million and $14.5 million for the three and nine months ended September 30, 2019, respectively, and $6.7 million and $21.1 million for the three and nine months ended September 30, 2018, respectively.

4. FAIR VALUE DISCLOSURES

The following methods, assumptions and valuation techniques were used in estimating the fair value of the company’s financial instruments:

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities the company can access at the measurement date.

Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or other means. Grain inventories held for sale in the agribusiness and energy services segment are valued at nearby futures values, plus or minus nearby basis.

Level 3 – unobservable inputs that are supported by little or no market activity and comprise a significant component of the fair value of the assets or liabilities. The company currently does not have any recurring Level 3 financial instruments.

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.

‎

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 September 30, 2018						Fair Value Measurements at September 30, 2019
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs				Quoted Prices in ‎ Active Markets for ‎Identical Assets		Significant Other ‎Observable Inputs
	(Level 1)		(Level 2)		Total		(Level 1)		(Level 2)		Total
Assets:
Cash and cash equivalents	$	171,674	$	-	$	171,674	$	235,537	$	-	$	235,537
Restricted cash		62,797		-		62,797		18,502		-		18,502
Inventories carried at market		-		81,141		81,141		-		62,230		62,230
Unrealized gains on derivatives		-		12,878		12,878		-		13,089		13,089
Other assets		114		1		115		113		4		117
Total assets measured at fair value	$	234,585	$	94,020	$	328,605	$	254,152	$	75,323	$	329,475

Liabilities:
Accounts payable (1)	$	-	$	15,602	$	15,602	$	-	$	27,038	$	27,038
Unrealized losses on derivatives		-		18,472		18,472		-		14,564		14,564
Other		-		25		25		-		1		1
Total liabilities measured at fair value	$	-	$	34,099	$	34,099	$	-	$	41,603	$	41,603


	Fair Value Measurements at December 31, 2018
	Quoted Prices in ‎ Active Markets for ‎Identical Assets		Significant Other ‎Observable Inputs
	(Level 1)		(Level 2)		Total
Assets:
Cash and cash equivalents	$	251,681	$	-	$	251,681
Restricted cash		31,603		-		31,603
Inventories carried at market		-		111,960		111,960
Unrealized gains on derivatives		-		9,976		9,976
Other assets		114		1		115
Cash, cash equivalents and restricted cash of discontinued operations ⁽²⁾		34,911		-		34,911
Total assets measured at fair value	$	318,309	$	121,937	$	440,246

Liabilities:
Accounts payable ⁽¹⁾	$	-	$	16,573	$	16,573
Unrealized losses on derivatives		-		7,852		7,852
Other liabilities		-		2		2
Total liabilities measured at fair value	$	-	$	24,427	$	24,427

15(1)Accounts payable is generally stated at historical amounts with the exception of $27.0 million and $16.6 million at September 30, 2019 and December 31, 2018, 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)Includes $2 thousand of cash and cash equivalents and $34.9 million of restricted cash which is classified as current assets of discontinued operations in the December 31, 2018 consolidated balance sheet.

Fair Value Measurements at December 31, 2017

Quoted Prices in
Active Markets for
Identical Assets

Significant Other
Observable Inputs

(Level 1)

(Level 2)

Total
Assets:

Cash and cash equivalents
$
266,651

$
-

$
266,651
Restricted cash

45,709

-

45,709
Inventories carried at market

-

26,834

26,834
Unrealized gains on derivatives

-

12,045

12,045
Other assets

115

-

115
Total assets measured at fair value
$
312,475

$
38,879

$
351,354

Liabilities:

Accounts payable (1)
$
-

$
37,401

$
37,401
Unrealized losses on derivatives

-

12,884

12,884
Other liabilities

-

92

92
Total liabilities measured at fair value
$
-

$
50,377

$
50,377

~~(1)~~

~~Accounts payable is generally stated at historical amounts with the~~ ~~exception of $15.6 million and $~~37.4 million at September 30, 2018, and December 31, 2017, 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.

The company believes the fair value of its debt approximated book value, which was ~~$1.4 billion~~$530.4 million at September 30, 2019 and $516.6 million at December 31, 2018. The company estimated the fair value of its outstanding debt using Level 2 inputs. The company believes the fair ~~value~~values of its accounts receivable approximated book value, which was ~~$135.0~~$64.3 million and ~~$151.1~~$88.5 million at September 30, ~~2018,~~2019 and December 31, ~~2017,~~2018, respectively.

Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible assets and goodwill acquired and the equity component of convertible debt ~~issued~~ represent Level 3 measurements which were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued.

‎

5. SEGMENT INFORMATION

The company reports the financial and operating performance for the following ~~four~~4 operating segments: (1) ethanol production, which includes the production of ethanol, ~~and~~ distillers grains and ~~recovery of~~ corn oil, (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, corn oil, natural gas and other commodities, (3) food and ingredients, which includes ~~cattle feeding, vinegar production and~~ food-grade corn oil ~~operations~~and vinegar production until the sale of Fleischmann’s Vinegar during the fourth quarter of 2018 and (4) partnership, which includes fuel storage and transportation services.

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 and corn oil for the ethanol production segment. The partnership segment provides fuel storage and transportation services for the ethanol production segment. These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values. Consequently, these transactions affect segment performance; however, they do not impact the company’s consolidated results since the revenues and corresponding costs are eliminated.

The following tables set forth certain financial data for the company’s operating segments, excluding amounts related to discontinued operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2018		2017		2018		2017		2019⁽¹⁾		2018⁽¹⁾		2019⁽¹⁾		2018⁽¹⁾
Revenues:
Ethanol production:
Revenues from external customers	$	573,399	$	620,180	$	1,726,418	$	1,857,356	$	484,382	$	576,475	$	1,206,107	$	1,735,546
Intersegment revenues		3,113		3,579		9,285		6,624		24		37		75		157
Total segment revenues		576,512		623,759		1,735,703		1,863,980		484,406		576,512		1,206,182		1,735,703
Agribusiness and energy services:
Revenues from external customers		174,290		164,604		546,151		483,670		146,650		177,832		488,687		558,054
Intersegment revenues		12,692		14,406		38,249		33,679		7,293		9,150		19,432		26,346
Total segment revenues		186,982		179,010		584,400		517,349		153,943		186,982		508,119		584,400
Food and ingredients:
Revenues from external customers		251,113		114,750		755,109		329,432		-		33,443		1,451		102,277
Intersegment revenues		38		38		118		113		-		-		-		-
Total segment revenues		251,151		114,788		755,227		329,545		-		33,443		1,451		102,277
Partnership:
Revenues from external customers		1,298		1,701		4,546		4,724		1,318		1,298		5,315		4,546
Intersegment revenues		24,472		24,748		72,949		74,019		18,836		24,472		56,751		72,949
Total segment revenues		25,770		26,449		77,495		78,743		20,154		25,770		62,066		77,495
Revenues including intersegment activity		1,040,415		944,006		3,152,825		2,789,617		658,503		822,707		1,777,818		2,499,875
Intersegment eliminations		(40,315)		(42,771)		(120,601)		(114,435)		(26,153)		(33,659)		(76,258)		(99,452)
Revenues as reported	$	1,000,100	$	901,235	$	3,032,224	$	2,675,182	$	632,350	$	789,048	$	1,701,560	$	2,400,423

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

‎

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017
Cost of goods sold:

Ethanol production
$
560,719

$
590,904

$
1,706,891

$
1,802,688
Agribusiness and energy services

179,432

168,735

546,318

487,239
Food and ingredients

236,150

98,854

702,355

281,898
Partnership

-

-

-

-
Intersegment eliminations

(39,917)

(42,706)

(120,220)

(114,123)

$
936,384

$
815,787

$
2,835,344

$
2,457,702


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2019⁽¹⁾		2018⁽¹⁾		2019⁽¹⁾		2018⁽¹⁾
Cost of goods sold:
Ethanol production	$	512,527	$	560,719	$	1,289,366	$	1,706,891
Agribusiness and energy services		150,465		179,432		486,305		546,318
Food and ingredients		3		26,228		1,526		79,894
Partnership		-		-		-		-
Intersegment eliminations		(30,866)		(33,299)		(76,716)		(99,189)
	$	632,129	$	733,080	$	1,700,481	$	2,233,914

(2)Cost of goods sold include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation. These cost of goods sold transactions are now presented gross in cost of goods sold. These cost of goods sold transactions total $5.5 million and $14.4 million for the three and nine months ended September 30, 2019, respectively, and $6.6 million and $21.0 million for the three and nine months ended September 30, 2018, respectively.


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2018		2017		2018		2017		2019		2018		2019		2018
EBITDA:
Operating income (loss):
Ethanol production	$	8,475	$	25,570	$	4,742	$	38,521	$	(49,289)	$	(15,961)	$	(147,366)	$	(60,704)
Agribusiness and energy services		3,537		5,150		24,035		15,910		(461)		2,850		9,184		22,080
Food and ingredients		12,151		13,272		47,192		39,741		(6)		3,892		(76)		12,426
Partnership		17,913		17,589		51,674		51,549		12,322		16,725		38,029		48,214
Intersegment eliminations		(325)		8		(113)		(147)		4,738		(325)		533		(113)
Corporate activities		(9,716)		(11,212)		(30,533)		(27,275)		(9,669)		(10,965)		(27,952)		(34,879)
	$	32,035	$	50,377	$	96,997	$	118,299	$	(42,365)	$	(3,784)	$	(127,648)	$	(12,976)

6. INVENTORIES

Inventories are carried at the lower of cost or net realizable value, except grain held for sale and fair-value hedged inventories. Commodities held for sale are reported at market value.

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


	September 30, ‎2019		December 31, ‎2018
Finished goods	$	119,711	$	99,566
Commodities held for sale		26,181		62,896
Raw materials		58,699		98,174
Work-in-process		13,640		12,680
Supplies and parts		32,383		29,284
	$	250,614	$	302,600

September 30,
2018

December 31,
2017
Finished goods
$
133,116

$
146,269
Commodities held for sale

43,328

65,693
Raw materials

126,231

144,520
Work-in-process

426,321

320,664
Supplies and parts

36,202

34,732

$
765,198

$
711,878

7. GOODWILL ~~AND INTANGIBLE ASSETS~~

Effective January 1, 2018, we early adopted the amended guidance in ASC Topic 350, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment, which simplifies the measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amended guidance, an entity may first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any).

The company ~~did not have any changes~~currently has 2 reporting units, to which goodwill is assigned. We are required to perform impairment tests related to our goodwill annually, which we perform as of October 1, or sooner if an indicator of impairment occurs. Near term industry outlook and the decline in our stock price caused a decline in the ~~carrying amount of goodwill, which was $182.9 million at~~company’s market capitalization during the three months ended September 30, ~~2018,~~2019. As such, the company determined a triggering event had occurred that required an interim impairment assessment for its ethanol production reporting unit. Due to the impairment indicators noted as a result of these triggering events, we evaluated our goodwill as of September 30, 2019. Significant assumptions inherent in the valuation methodologies for goodwill are employed and ~~December 31, 2017. Goodwill~~include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of ~~$30.3 million, $142.0 million and $10.6 million are attributable~~capital. Based on our quantitative evaluation, we determined that the fair value of the ethanol production reporting unit exceeded its carrying value. As a result, we concluded that the goodwill assigned to the ethanol production ~~segment, food and ingredients segment and the partnership segment, respectively.~~reporting unit was not impaired, but could be at risk of future impairment. We continue to believe that our long-term financial goals will be achieved.

~~Intangible Assets~~

As of September 30, 2018, the company’s customer relationship intangible asset recognized in connection with the Fleischmann Vinegar’s acquisition is $69.3 million, net of $10.7 million of accumulated amortization, and has a remaining 13.0-year weighted-average amortization period. As of September 30, 2018, the company also has an indefinite-lived trade name intangible asset of $10.5 million. The company recognized $1.3 million and $4.0 million of amortization expense associated with the amortizing customer relationship intangible asset during the three and nine months ended September 30, 2018, respectively, and $1.1 million and $3.9 million during the three and nine months ended September 30, 2017, respectively, and expects estimated amortization expense for the next five years of $5.3 million per annum. The company’s intangible assets are recorded within other assets on the consolidated balance sheets.

8. DERIVATIVE FINANCIAL INSTRUMENTS

At September 30, ~~2018,~~2019, the company’s consolidated balance sheet reflected unrealized losses of ~~$17.2~~$11.8 million, net of tax, in accumulated other comprehensive income. The company expects these ~~losses will~~amounts to be reclassified toas operating income over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in operating income will differ as commodity prices change.

‎

Fair Values of Derivative Instruments

The fair values of the company’s derivative financial instruments and the line items on the consolidated balance sheets where they are reported are as follows (in thousands):


	Asset Derivatives'				Liability Derivatives'				Asset Derivatives'				Liability Derivatives'
	Fair Value				Fair Value				Fair Value				Fair Value
	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, ‎2019⁽¹⁾		December 31, ‎2018⁽²⁾		September 30, ‎2019		December 31, ‎2018
Derivative financial instruments ~~(1)~~	$	12,878	$	12,045	$	18,472	$	12,884	$	13,089	$	9,976	$	14,564	$	7,852
Other assets		1		-		-		-		4		1		-		-
Other liabilities		-		-		25		92		-		-		1		2
Total	$	12,879	$	12,045	$	18,497	$	12,976	$	13,093	$	9,977	$	14,565	$	7,854

~~(1)~~

~~At September 30, 2018, derivative~~ ~~financial instruments, as reflected on the balance sheet, include net unrealized gains on exchange traded futures and options contracts of $11.4 million, which included $1.2 million of net~~ ~~unrealized gains on~~ ~~derivative financial instruments designated as cash flow hedging instruments. At~~ ~~September 30, 2018, derivative~~ ~~financial instruments, as reflected on the balance sheet, include net unrealized losses on exchange traded futures and options contracts of $23.3 million, which included $22.5 million of net~~ ~~unrealized losses on~~ derivative financial instruments designated as cash flow hedging instruments. At December 31, 2017, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $8.5 million, which included $0.3 million of net ~~unrealized gains on~~ ~~derivative financial instruments designated as cash flow hedging instruments.~~

(1)At September 30, 2019, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $16.5 million, which include $0.2 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments.

(2)At December 31, 2018, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $16.3 million.

Refer to Note 4 - Fair Value Disclosures, which contains fair value information related to derivative financial instruments.

Effect of Derivative Instruments on Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income

The gains or losses recognized in income and other comprehensive income related to the company’s derivative financial instruments and the line items on the consolidated financial statements where they are reported are as follows (in thousands):

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Location of Gain or (Loss)
Reclassified from Accumulated Other

Three Months Ended
September 30,

Nine Months Ended
September 30,
Comprehensive Income into Income

2018

2017

2018

2017
Revenues

$
(3,197)

$
(5,242)

$
(1,749)

$
1,734
Cost of goods sold

1,350

(1,861)

1,451

(1,679)
Net gain (loss) recognized in earnings before tax

$
(1,847)

$
(7,103)

$
(298)

$
55


	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
into Income	2019		2018		2019		2018
Revenues	$	-	$	4,766	$	-	$	3,648
Cost of goods sold		-		1,331		-		1,258
Net income from discontinued operations, net of income taxes		66,700		(7,944)		48,797		(5,204)
Net gain (loss) recognized in loss before tax	$	66,700	$	(1,847)	$	48,797	$	(298)

Loss Recognized in Other Comprehensive Income on Derivatives
Loss Recognized in

Three Months Ended
September 30,

Nine Months Ended
September 30,
Other Comprehensive Income on Derivatives

2018

2017

2018

2017
Commodity contracts

$
(18,709)

$
(12,235)

$
(1,865)

$
(15,069)


	Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives
Gain (Loss) Recognized in Other	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
Comprehensive Income on Derivatives	2019		2018		2019		2018
Commodity contracts	$	33,244	$	(18,709)	$	67,425	$	(1,865)


		Amount of Gain or (Loss)
		Recognized in Income on Derivatives
Derivatives Not Designated	Location of Gain or (Loss) Recognized in	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
as Hedging Instruments	Income on Derivatives	2019		2018		2019		2018
Commodity contracts	Revenues	$	12,439	$	2,491	$	(12,034)	$	6,135
Commodity contracts	Costs of goods sold		5,465		9,987		(1,484)		12,550
Commodity contracts	Net income from discontinued operations, net of income taxes		(2,285)		(3,595)		(2,470)		(1,716)
Net gain (loss) recognized in loss before tax		$	15,619	$	8,883	$	(15,988)	$	16,969

Amount of Gain or (Loss)

Recognized in Income on Derivatives
Derivatives Not Designated

Location of Gain or
(Loss) Recognized in

Three Months Ended
September 30,

Nine Months Ended
September 30,
as Hedging Instruments

Income on Derivatives

2018

2017

2018

2017
Commodity contracts

Revenues

$
(2,069)

$
2,863

$
5,894

$
(7,400)
Commodity contracts

Costs of goods sold

10,952

2,036

11,075

17,256
Net gain recognized in loss before tax

$
8,883

$
4,899

$
16,969

$
9,856

~~As of September 30, 2018, the~~The following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the fair value hedged items (in thousands):


					September 30, 2019				December 31, 2018
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 Assets		Carrying Amount of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets		Carrying Amount of the Hedged Assets		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets
Inventories	$	76,099	$	6,826	$	41,356	$	(2,445)	$	89,188	$	2,430

~~As of December 31, 2017, no amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the fair value hedged items.~~

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

The effect of cash flow and fair value hedges and the line items on the consolidated statements of operations where they are reported are as follows (in thousands):


	Location and Amount of Gain or (Loss) Recognized in								Location and Amount of Gain or (Loss) Recognized in
	Income on Cash Flow and Fair Value Hedging Relationships								Income on Cash Flow and Fair Value Hedging Relationships
	for the Three Months Ended September 30,								for the Three Months Ended September 30,
		2018				2017				2019						2018
		Revenue		Cost of Goods Sold		Revenue		Cost of Goods Sold	Revenue		Cost of ‎Goods Sold		Income from Discontinued Operations, Net of Income Taxes			Revenue	Cost of ‎Goods Sold		Income from Discontinued Operations, Net of Income Taxes
Gain (loss) on cash flow hedging relationships:

Commodity contracts:
Amount of gain (loss) reclassified from accumulated other comprehensive income into income	$	(3,197)	$	1,350	$	(5,242)	$	(1,861)	$	-	$	-	$	66,700	$	4,766	$	1,331	$	(7,944)

Gain (loss) on fair value hedging relationships:

Commodity contracts:
Hedged item		-		(346)		61		(1,775)		-		1,155		-		-		(346)		-
Derivatives designated as hedging instruments		-		(186)		(61)		3,085		-		(3,263)		-		-		(186)		-

Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded	$	(3,197)	$	818	$	(5,242)	$	(551)	$	-	$	(2,108)	$	66,700	$	4,766	$	799	$	(7,944)


	Location and Amount of Gain Recognized in
	Income on Cash Flow and Fair Value Hedging Relationships
	for the Nine Months Ended September 30,
		2019						2018
	Revenue		Cost of ‎Goods Sold		Income from Discontinued Operations, Net of Income Taxes		Revenue		Cost of ‎Goods Sold		Income from Discontinued Operations, Net of Income Taxes
Gain (loss) on cash flow hedging relationships:

Commodity contracts:
Amount of gain reclassified from accumulated other comprehensive income into income	$	-	$	-	$	48,797	$	3,648	$	1,258	$	(5,204)

Gain (loss) on fair value hedging relationships:

Commodity contracts:
Hedged item		-		324		-		-		10,150		-
Derivatives designated as hedging instruments		-		1,168		-		-		(9,064)		-

Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded	$	-	$	1,492	$	48,797	$	3,648	$	2,344	$	(5,204)

Location and Amount of Gain or (Loss) Recognized in

Income on Cash Flow and Fair Value Hedging Relationships

for the Nine Months Ended September 30,

2018

2017

Revenue

Cost of
Goods Sold

Revenue

Cost of
Goods Sold
Gain on cash flow hedging relationships:

Commodity contracts:

Amount of gain reclassified from accumulated other comprehensive income into income
$
(1,749)

$
1,451

$
1,734

$
(1,679)

Gain (loss) on fair value hedging relationships:

Commodity contracts:

Hedged item

-

10,150

1,451

(6,229)
Derivatives designated as hedging instruments

-

(9,064)

(1,734)

8,530

Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded
$
(1,749)

$
2,537

$
1,451

$
622

There were no0 gains or losses from discontinuing cash flow or fair value hedge treatment during the three and nine months ended September 30, ~~2018,~~2019 and ~~2017.~~2018.

The open commodity derivative positions as of September 30, ~~2018,~~2019, are as follows (in thousands):



	Exchange Traded ⁽¹⁾		Non-Exchange Traded ⁽²⁾
Derivative ‎Instruments	Net Long & ‎(Short)		Long	(Short)	Unit of ‎Measure	Commodity
Futures	(12,185)				Bushels	Corn, Soybeans and Wheat
Futures	(4,620)	⁽³⁾			Bushels	Corn
Futures	136,206				Gallons	Ethanol
Futures	(6,300)	⁽⁴⁾			Gallons	Ethanol
Futures	(1,123)				MmBTU	Natural Gas
Futures	(11,045)	⁽³⁾			MmBTU	Natural Gas
Options	765				Bushels	Corn and Soybeans
Options	(55,815)				Gallons	Ethanol
Options	196				MmBTU	Natural Gas
Forwards			33,986	(518)	Bushels	Corn and Soybeans
Forwards			23,970	(478,004)	Gallons	Ethanol
Forwards			126	(730)	Tons	DDG
Forwards			192	(54,313)	Pounds	Corn Oil
Forwards			12,841	(3,095)	MmBTU	Natural Gas

(1)Exchange traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis.

September 30, 2018

Exchange Traded

Non-Exchange Traded

Derivative
Instruments

Net Long &
(Short) (1)

Long (2)

(Short) (2)

Unit of
Measure

Commodity

Futures

(52,335)

Bushels

Corn, Soybeans and Wheat
Futures

(11,450)
(4)

Bushels

Corn
Futures

5,135

Gallons

Ethanol
Futures

(25,620)

Gallons

Ethanol
Futures

(18,798)

MmBTU

Natural Gas
Futures

(13,413)
(4)

MmBTU

Natural Gas
Futures

(57,250)

Pounds

Cattle
Futures

(413,720)
(3)

Pounds

Cattle
Futures

21

Barrels

Crude Oil
Futures

(600)

Tons

Soybean Meal
Futures

3,570

Gallons

Natural Gasoline
Options

14,409

Bushels

Corn, Soybeans and Wheat
Options

3,266

Gallons

Ethanol
Options

(74)

MmBTU

Natural Gas
Options

862

Pounds

Livestock
Options

78

Barrels

Crude Oil
Forwards

41,789

(138)

Bushels

Corn and Soybeans
Forwards

19,132

(426,529)

Gallons

Ethanol
Forwards

212

(421)

Tons

DDG
Forwards

12,222

(70,173)

Pounds

Corn Oil
Forwards

22,501

(1,858)

MmBTU

Natural Gas
Forwards

61

(31)

Barrels

Crude Oil

(2)Non-exchange traded forwards are presented on a gross long and (short) position basis including both fixed-price and basis contracts.

(3)Futures or non-exchange traded forwards used for fair value hedges.

(4)Futures used for cash flow hedges.

‎

~~(1)~~

~~Exchange traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis.~~

~~(2)~~

~~Non-exchange traded forwards are presented on a gross long and (short) position basis including both fixed-price and basis contracts.~~

~~(3)~~

~~Futures used for cash flow hedges.~~

~~(4)~~

~~Futures used for fair~~ ~~value~~ ~~hedges.~~

Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Included in revenues are net gains on energy trading contracts of $2.1 million and $11.4 million for the three and nine months ended September 30, 2019, respectively and net gains on energy trading contracts of $1.6 million and $12.4 million for the three and nine months ended September 30, 2018, ~~respectively, and net gains of $3.1 million and $18.3 million for the three and nine months ended September 30, 2017,~~ respectively.

9. DEBT

The components of long-term debt are as follows (in thousands):


	September 30, ‎2019		December 31, ‎2018
Corporate:
3.25% convertible notes due 2019	$	-	$	53,457
4.125% convertible notes due 2022		147,562		142,708
4.00% convertible notes due 2024		82,191		-
Green Plains Partners:
$200.0 million revolving credit facility ⁽¹⁾		132,000		134,000
$8.1 million promissory note		8,100		8,100
Other		16,602		17,804
Total face value of long-term debt		386,455		356,069
Unamortized debt issuance costs		(5,167)		(3,190)
Less: current maturities of long-term debt		(132,999)		(54,769)
Total long-term debt	$	248,289	$	298,110

(1)The Green Plains Partners revolving credit facility is included in current maturities of long-term debt balance on the consolidated balance sheet as of September 30, 2019 as its maturity date is July 1, 2020.

September 30,
2018

December 31,
2017
Corporate:

$500.0 million term loan
$
495,000

$
498,750
3.25% convertible notes due 2018

6,897

61,442
3.25% convertible notes due 2019

52,157

-
4.125% convertible notes due 2022

141,163

136,739
Green Plains Partners:

$235.0 million revolving credit facility

128,000

126,900
Other

26,489

27,744
Total face value of long-term debt

849,706

851,575
Unamortized debt issuance costs

(16,915)

(16,256)
Less: current portion of long-term debt

(65,614)

(67,923)
Total long-term debt
$
767,177

$
767,396

The components of short-term notes payable and other borrowings are as ~~follows (in thousands):~~follows:


	September 30, 2018		December 31, 2017		September 30, ‎2019		December 31, ‎2018
Green Plains Cattle:
$500.0 million revolver(1)	$	376,684	$	270,860	$	-	$	-
Green Plains Grain:
$125.0 million revolver		30,000		75,000
$50.0 million inventory financing		4,032		-
Green Plains Trade:
$300.0 million revolver		133,737		180,320		119,625		108,485
Green Plains Grain:
$100.0 million revolver						20,000		41,000
$50.0 million inventory financing						4,040		-
Green Plains Commodity Management:
$20.0 million hedge line		12,113		-		5,478		14,266
	$	556,566	$	526,180	$	149,143	$	163,751

~~Corporate Activities~~

On August 29, 2017, the company entered into a $500.0 million term loan agreement, which matures on August 29, 2023, to refinance approximately $405.0 million of total debt outstanding issued by Green Plains Processing and Fleischmann’s Vinegar, pay associated fees and expenses and for general corporate purposes. The term loan is guaranteed by the company and substantially all of its subsidiaries, except for Green Plains Partners and certain other entities, and secured by substantially all(1)As part of the ~~assets~~GPCC disposition during the three months ended September 30, 2019, the December 31, 2018 outstanding balance of the ~~company, including 17 ethanol production facilities, vinegar production facilities and a second priority lien on the assets secured under the revolving credit facilities at Green Plains Trade,~~ Green Plains Cattle revolver of $374.5 million has been reclassified to current liabilities of discontinued operations. Refer to Note 3 – Acquisitions, Dispositions and ~~Green Plains Grain.~~ Discontinued Operations for further discussion on discontinued operations.

The credit agreement contains certain customary representations and warranties, affirmative covenants, negative covenants, financial covenants and events of default. The negative covenants include restrictions on the ability to incur additional indebtedness, acquire and sell assets, create liens, make investments, pay distributions and enter into transactions with affiliates. At the end of each fiscal quarter, the covenants of the credit agreement require the company to maintain a maximum term debt to total term capitalization of 55% and a minimum interest coverage ratio of 1.25 to 1.00, as defined in the credit agreement. Beginning in 2018, the credit facility also has a provision requiring the company to make special annual payments of 50% or 75% of its available free cash flow, subject to certain limitations. Voluntary term loan prepayments are subject to prepayment fees of 1.0% if prepaid before the eighteen-month anniversary of the credit agreement. Scheduled principal payments are $1.25 million each quarter until maturity. The term loan bears interest at a floating rate of a base rate plus a margin of 4.50% or LIBOR plus a margin of 5.50%.Corporate Activities

~~In September 2013,~~On June 21, 2019, the company issued ~~$120.0~~$105.0 million of 4.00% convertible senior notes due in 2024, or the 4.00% notes. The company used approximately $57.8 million of the net proceeds to repurchase the $56.8 million outstanding principal amount of its 3.25% convertible senior notes due ~~2018,~~October 1, 2019 in cash, including accrued and unpaid interest, in privately negotiated transactions concurrently with the offering of the 4.00% notes. On July 19, 2019, the company closed on the issuance of an additional $10.0 million aggregate principal amount of the 4.00% notes (the “Option Notes”) to the initial purchasers. The Option Notes have the same terms as the 4.00% notes issued on June 21, 2019, and were issued under the same Indenture dated as of June 21, 2019. After the issuance of the Option Notes, total aggregate principal of the 4.00% notes outstanding is $115.0 million.

At issuance, the company separately accounted for the liability and equity components of the 3.25% convertible notes by bifurcating the gross proceeds between the indebtedness, or liability component, and the ~~3.25%~~embedded conversion option, or

equity component, by estimating an effective interest rate on the date of issuance for similar notes. The ~~3.25%~~embedded conversion option was recorded in stockholders’ equity. Since the company did not exercise the embedded conversion option associated with the notes, pursuant to the guidance within ASC 470, Debt, the company recorded a loss upon extinguishment of $1.6 million, measured by the difference between the fair value and carrying value of the liability portion of the notes. As a result, the company recorded a charge to interest expense in the consolidated financial statements of approximately $1.6 million during the three months ended June 30, 2019. This charge included $0.1 million of unamortized debt issuance costs related to the principal balance extinguished. The remaining settlement consideration transferred was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of additional paid-in capital.

The 4.00% notes are senior, unsecured obligations of the company, with interest payable on ~~April~~January 1 and ~~October~~July 1 of each ~~year. Prior to close~~year, beginning January 1, 2020, at a rate of 4.00% per annum. The 4.00% notes will mature on July 1, 2024, unless earlier converted, redeemed or repurchased. The 4.00% notes will be convertible, at the option of the ~~exchange agreements on October 1, 2018,~~holders, into consideration consisting of, at the ~~company could settle~~company’s election, cash, shares of the ~~3.25% notes in cash,~~

company’s common stock, or a combination of cash and shares of the company’s common ~~stock. Prior to April~~stock until the close of business on the scheduled trading day immediately preceding the maturity date. However, before January 1, ~~2018,~~2024, the ~~3.25%~~4.00% notes ~~were~~will not be convertible unless certain conditions are satisfied. The initial conversion rate is subject to adjustment upon the occurrence of certain events, including when the quarterly cash dividend exceeds $0.04 per share. The conversion rate was recently adjusted as of September 30, 2018, to 50.875364.1540 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately ~~$19.66~~$15.59 per share. ~~For all conversions~~The conversion rate will be subject to adjustment upon the occurrence of ~~notes which occur on or after April 1, 2018,~~certain events. In addition, the company ~~has elected~~may be obligated to ~~convert~~increase the conversion rate for ~~whole shares of common stock~~any conversion that occurs in connection with ~~any fractional share being settled with cash in lieu.~~certain corporate events, including the company’s calling the 4.00% notes for redemption.

~~Prior~~On and after July 1, 2022, and prior to the ~~close of the exchange agreements on October 1, 2018,~~maturity date, the company ~~could~~may redeem all, but not less than all, of the ~~3.25%~~4.00% notes ~~at any time on or after October 1, 2016,~~for cash if the sale price of the company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the company delivers notice of the redemption. The redemption price will equal 100% of the principal amount of the 4.00% notes to be redeemed, plus any accrued and unpaid ~~interest. Holders~~interest to, but excluding, the redemption date. In addition, upon the occurrence of a fundamental change, holders of the ~~3.25%~~4.00% notes will have the right, at their option, to require the company to repurchase the ~~3.25%~~4.00% notes in cash at a price equal to 100% of the principal amount of the 4.00% notes to be repurchased, plus accrued and unpaid interest ~~when there is a~~to, but excluding, the fundamental change ~~such as change in control. If an event of default occurs, it could result in the 3.25% notes being declared due and payable.~~repurchase date.

During fiscal year 2017, approximately $56.3 million in aggregate principal of the 3.25% notes were exchanged for cash and 2,783,725 shares of the company’s common stock. During the three months ended June 30, 2018, an additional 50 shares of the company’s common stock were exchanged for approximately $1 thousand in aggregate principal amount of the 3.25% notes.

During the three months ended September 30, 2018, the company entered into exchange agreements with certain beneficial owners of the company’s outstanding 3.25% convertible senior notes due 2018 (the “Old Notes”), pursuant to which such Investors exchanged (the “Exchange”) $56.8 million in aggregate principal amount of the Old Notes for $56.8 million in aggregate principal amount of notes due 2019 (the “New Notes”). The company evaluated the Exchange in accordance with ASC 470-50 and concluded that the Exchange qualified as a debt modification as the cash flows and fair value of the embedded conversion option of the New Notes were not substantially different from the Old Notes. As a result, the New Notes were recorded at fair value at the time of the exchange, and the company recorded a non-cash adjustment to additional paid-in capital of $4.7 million related to the difference in fair value of the embedded conversion option of the Old Notes and the New Notes. Following the closing of these agreements, $6.9 million aggregate principal of the Old Notes remain outstanding. On October 1, 2018, the maturity date of the Old Notes, the remaining aggregate principal of $6.9 million was paid.

The New Notes are the senior, unsecured obligations of the company and bear interest at a rate of 3.25% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2018. Interest on the New Notes will accrue from, and including, April 1, 2018. The New Notes will mature on October 1, 2019, unless earlier converted. Holders of New Notes may convert their New Notes, at their option, in integral multiples of $1,000 principal amount, at any time prior to the close of business on the scheduled trading day immediately preceding the maturity date of the New Notes. The conversion rate for the New Notes was initially��50.6481 shares of the company’s common stock per $1,000 principal amount of New Notes, which corresponded to an initial conversion price of approximately $19.74 per share of the company’s common stock. The conversion rate will be subject to adjustment upon the occurrence of certain events. Upon conversion of the convertible notes, the company will settle its conversion obligation by delivering shares of its common stock at the applicable conversion rate, together with cash in lieu of any fractional share.

The company does not have the right to redeem the New Notes at its election before their maturity. The New Notes are subject to customary provisions providing for the acceleration of their principal and interest upon the occurrence of events that constitute an “event of default.” Events of default include, among other events, certain payment defaults, defaults in settling conversions, certain defaults under the company’s other indebtedness and certain insolvency-related events. Upon maturity, the company will settle the New Notes in cash.

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 are senior, unsecured obligations of the company, with interest payable on March 1 and September 1 of each year. The company may settle the 4.125% notes in cash, common stock or a combination of cash and common stock.

Prior to March 1, 2022, the 4.125% notes are not convertible unless certain conditions are satisfied. ~~The conversion rate is subject to adjustment upon the occurrence of certain events, including when the quarterly cash dividend exceeds $0.12 per~~

~~share and upon redemption of the 4.125% notes.~~ The initial conversion rate is 35.7143 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately $28.00 per share. The conversion rate is subject to adjustment upon the occurrence of certain events, including upon redemption of the 4.125% notes.

The company may redeem all, but not less than all, of the 4.125% notes at any time on or after September 1, 2020, if the company’s common stock equals or exceeds 140% of the applicable conversion price for a specified time period ending on the trading day immediately prior to the date the company delivers notice of the redemption. The redemption price will equal 100% of the principal plus any accrued and unpaid interest. Holders of the 4.125% notes have the option to require the company to repurchase the 4.125% notes in cash at a price equal to 100% of the principal plus accrued and unpaid interest when there is a fundamental change, such as change in control. If an event of default occurs, it could result in the 4.125% notes being declared due and payable.

Ethanol Production Segment

~~We have~~The company has small equipment financing loans, ~~capital~~finance leases on equipment or facilities, and other forms of debt financing.

Agribusiness and Energy Services Segment

Green Plains ~~Grain~~Trade has a ~~$125.0~~$300.0 million senior secured asset-based revolving credit facility to finance working capital for marketing and distribution activities based on eligible collateral equal to the sum of percentages of eligible receivables and inventories, less miscellaneous adjustments. The credit facility matures on July 28, 2022 and consists of a $285 million credit facility and a $15 million first-in-last-out (FILO) credit facility, and includes an accordion feature that enables the credit facility to be increased by up to $70.0 million with agent approval. Advances are subject to variable interest rates equal

to daily LIBOR plus 2.25% on the credit facility and daily LIBOR plus 3.25% on the FILO credit facility. The total unused portion of the revolving credit facility is also subject to a commitment fee of 0.375% per annum.

The terms impose affirmative and negative covenants for Green Plains Trade, including maintaining a minimum fixed charge coverage ratio of 1.15 to 1.00. Capital expenditures are limited to $1.5 million per year under the credit facility. The credit facility also restricts distributions related to capital stock, with an exception for distributions up to 50% of net income if, on a pro forma basis, (a) availability has been greater than $10.0 million for the last 30 days and (b) the borrower would be in compliance with the fixed charge coverage ratio on the distribution date.

Green Plains Grain has a senior secured asset-based revolving credit facility, which was amended on June 28, 2019, to extend the existing maturity date from July 26, 2019 to June 28, 2022 and lower the maximum commitment from $125.0 million to $100.0 million. The credit facility finances working capital up to the maximum commitment based on eligible collateral equal to the sum of percentages of eligible cash, receivables and inventories, less miscellaneous adjustments. ~~The credit facility matures on July 26, 2019.~~ Advances are subject to an interest rate equal to LIBOR plus 3.00% or the lenders’ base rate plus 2.00%. The credit facility also includes an accordion feature that enables the facility to be increased by up to $75.0 million with agent approval. The credit facility can also be increased by up to $50.0 million for seasonal borrowings. Total commitments outstanding cannot exceed ~~$250.0~~$225.0 million. ~~The~~Depending on utilization, the total unused portion of the ~~$125.0~~$100.0 million revolving credit facility is also subject to a commitment fee ranging from 0.375% to 0.50% ~~per annum depending on utilization.~~.

Lenders receive a first priority lien on certain cash, inventory, accounts receivable and other assets owned by Green Plains ~~Grain and a second priority lien on substantially all of the assets of the company, including 17 ethanol production facilities and vinegar production facilities as security on the credit facility.~~Grain. The terms impose affirmative and negative covenants for Green Plains Grain, including maintaining minimum working capital to be the greater of ~~$22.0 million~~ (i) $18,000,000 and (ii) 18% of the sum of the then total commitment plus the aggregate seasonal line commitments. Minimum tangible net worth is required to be greater than 21% of ~~$27.0 million~~.the sum of the then total commitment plus the aggregate seasonal line commitments. The credit facility also requires the company to maintain a maximum annual leverage of 6.00 to 1.00. Capital expenditures are limited to $8.0 million per year under the credit facility, plus equity contributions from the company and unused amounts of up to $8.0 million from the previous year. In addition, if the company has long-term indebtedness on the date of calculation of greater than $10.0 million, the credit facility requires the company to maintain a minimum fixed charge coverage ratio of 1.25 to 1.00 and a maximum ~~annual leverage ratio~~long term debt capitalization of ~~6.00 to 1.00 at the end of each quarter. The fixed charge coverage ratio and long-term capitalization ratio apply only if the company has long-term indebtedness on the date of calculation.~~40%. As of September 30, ~~2018,~~2019, Green Plains Grain had no0 long-term indebtedness. ~~The credit facility also contains restrictions on distributions related to capital stock, with exceptions for distributions up to 50% of net profit before tax, subject to certain conditions.~~

Green Plains Trade has a $300.0 million senior secured asset-based revolving credit facility to finance working capital for marketing and distribution activities based on eligible collateral equal to the sum of percentages of eligible receivables and inventories, less miscellaneous adjustments. The credit facility consists of a $285 million credit facility and a $15 million first-in-last-out (FILO) credit facility, and includes an accordion feature that enables the credit facility to be increased by up to $70.0 million with agent approval. Advances are subject to variable interest rates equal to daily LIBOR plus 2.25% on the credit facility and daily LIBOR plus 3.25% on the FILO credit facility. The total unused portion of the revolving credit facility is also subject to a commitment fee of 0.375% per annum.

~~The terms impose affirmative and negative covenants for Green Plains Trade, including maintaining a minimum fixed charge coverage ratio of 1.15 to 1.00. Capital expenditures are~~ ~~limited to $1.5 million per~~ year under the credit facility. The credit facility also restricts distributions related to capital stock, with an exception for distributions up to 50% of net income if, on a pro forma basis, (a) availability has been greater than $10.0 million for the last 30 days and (b) the borrower would be in compliance with the fixed charge coverage ratio on the distribution date.

Green Plains Grain has entered into short-term inventory financing agreements with a financial institution. At September 30, ~~2018, 1.0~~2019, 0.9 million bushels of corn had been designated as collateral under these agreements at initial values totaling ~~$4.2~~$3.8 million. The company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the inventory. At September 30, ~~2018,~~2019, the short-term notes payable were valued at $4.0 million and were measured using Level 2 inputs.

Food and Ingredients Segment

~~Green Plains Cattle has a~~On August 28, 2019, GPCC entered into an amended and restated $500 million senior secured asset-based revolving credit facility with a group of lenders led by Bank of the West and ING Capital LLC which was amended on July 31, 2018, to increase the maximum commitment from $425.0 million to $500.0 million and can be increased by an additional $100.0 million with agent approval. The credit facility, which matures on April 30, 2020, finances ~~working capital for the cattle feeding operations~~ ~~up to the maximum commitment based on eligible collateral equal to the sum of percentages of eligible receivabl~~es, inventories and other current assets, less miscellaneous adjustments. Advances, as amended, are subject to variable interest rates equal to LIBOR plus 2.00% to 3.00%, or the base rate plus 1.00% to 2.00%, dependingconditional upon the ~~preceding three months’ excess borrowing availability.~~ closing and formation of the GPCC joint venture which became effective on September 1, 2019. The amended ~~credit facility also~~and restated agreement includes ~~an accordion feature that enables the credit facility~~revisions to be increased by up to $75.0 million with agent approval. The unused portion of the credit facility is also subject to a commitment fee of 0.20% to 0.30% per annum, depending on the preceding three months’ excess borrowing availability.

~~Lenders receive a first priority lien on~~ certain ~~cash, inventory, accounts receivable, property and equipment and other assets owned by Green Plains Cattle~~ ~~and a second priority lien on substantially all of the assets of the company, including 17 ethanol production facilities and vinegar production facilities~~ ~~as security on the credit facility~~. ~~The amended terms impose affirmative and negative~~ covenants including ~~maintaining a minimum working capital~~the calculations of ~~15% of the commitment amount, minimum~~ tangible net worth, restricted payments and excess cash reserves. The amended and restated agreement also updated the definition of ~~20%~~a change in control as Green Plains owning less than 35% of ~~the commitment amount, plus 50%~~GPCC, which previously had been Green Plains owning less than 100% of ~~net profit from the previous year, and a maximum total debt to tangible net worth ratio~~GPCC.

The December 31, 2018 outstanding balance of ~~3.50~~ ~~to 1.00. Capital expenditures are limited to $10.0 million per year under the~~GPCC’s senior secured asset-based revolving credit facility ~~plus $10.0 million per year if funded by a contribution from parent, plus~~has been reclassified to current liabilities of discontinued operations. Upon the disposition of GPCC, the food and ingredient segment no longer records any ~~unused amounts from~~forms of debt financing. Refer to Note 3 – Acquisitions, Dispositions and Discontinued Operations for further discussion on the ~~previous year.~~disposition and discontinued operations classification.

Partnership Segment

September 30, 2019. Advances under the credit facility are subject to a floating interest rate based on the preceding fiscal quarter’s consolidated leverage ratio at a base rate plus 1.25% to 2.00% or LIBOR plus 2.25% to 3.00%. The credit facility can be increased by an additional $20.0 million without the consent of the lenders. The unused portion of the credit facility is also subject to a commitment fee of 0.35% to 0.50%, depending on the preceding fiscal quarter’s consolidated leverage ratio.

The partnership’s obligations under the credit facility are secured by a first priority lien on (i) the capital stock of the partnership’s present and future subsidiaries, (ii) all of the partnership’s present and future personal property, such as investment property, general intangibles and contract rights, including rights under agreements with Green Plains Trade, and (iii) all proceeds and products of the equity interests of the partnership’s present and future subsidiaries and its personal property. The terms impose affirmative and negative covenants including restricting the partnership’s ability to incur additional debt, acquire and sell assets, create liens, invest capital, pay distributions and materially amend the partnership’s commercial agreements with Green Plains Trade. The credit facility also requires the partnership to maintain a maximum consolidated net leverage ratio of ~~3.50 to 1.00,~~no more than 3.50x and a minimum consolidated interest coverage ratio of ~~2.75 to 1.00,~~no less than 2.75x, each of which is calculated on a pro forma basis with respect to acquisitions and divestitures occurring during the applicable period. The consolidated leverage ratio is calculated by dividing total funded indebtedness minus the lesser of cash in excess of $5.0 million or $30.0 million by the sum of the four preceding fiscal quarters’ consolidated EBITDA. The consolidated interest coverage ratio is calculated by dividing the sum of the four preceding fiscal quarters’ consolidated EBITDA by the sum of the four preceding fiscal quarters’ interest charges.

The partnership, through a wholly owned subsidiary, has promissory notes payable of $8.1 million, which is recorded in long-term debt and current maturities of long-term debt, and a note receivable of $8.1 million, which is recorded in other assets, to execute a New Markets Tax Credit transaction related to the Birmingham, Alabama terminal. Beginning in March 2020, the promissory notes and note receivable each require quarterly principal and interest payments of approximately $0.2 million. The partnership retains the right to call the $8.1 million note receivable in June 2020, which would be correspondingly offset by forgiveness of the note payable. The promissory notes payable and note receivable will be fully amortized upon maturity in September 2031. Income tax credits were generated for the lender, which the company has guaranteed over their statutory life of seven years in the event the credits are recaptured or reduced. At the time of the transaction, the income tax credits were valued at $5.0 million. The partnership has not established a liability in connection with the guarantee because it believes the likelihood of recapture or reduction is remote.

Covenant Compliance

The company was in compliance with its debt covenants as of September 30, ~~2018.~~2019.

Restricted Net Assets

At September 30, ~~2018,~~2019, there were approximately ~~$171.2~~$63.5 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.

10. STOCK-BASED COMPENSATION

The company has an equity incentive plan that reserves 4,110,000 shares of common stock for issuance to its directors and employees. The plan provides for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, performance shares, 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.

‎

Restricted Stock ~~Options~~Awards and Deferred Stock Units

The ~~activity related to the exercisable~~non-vested stock ~~options~~award and deferred stock unit activity for the nine months ended September 30, ~~2018,~~2019, is as follows:

Shares

Weighted-Average
Exercise Price

Weighted-Average
Remaining
Contractual Term
(in years)

Aggregate Intrinsic Value
(in thousands)
Outstanding at December 31, 2017
143,750

$
12.44

1.8

$
635
Granted
-

-

-

-
Exercised
(15,000)

10.00

-

120
Forfeited
-

-

-

-
Expired
-

-

-

-
Outstanding at September 30, 2018
128,750

$
12.72

1.2

$
577
Exercisable at September 30, 2018 (1)
128,750

$
12.72

1.2

$
577


	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, 2018	882,288	$	19.12
Granted	497,118		15.40
Forfeited	(83,811)		17.56
Vested	(444,054)		18.33
Non-Vested at September 30, 2019	851,541	$	17.52	1.7

Performance Shares

On February 19, 2019 and March 19, 2018, the board of directors granted performance shares to be awarded in the form of common stock to certain participants of the plan. Performance shares vest based on the company’s average return on net assets (RONA) and the company’s total shareholder return (TSR), as further described herein. The performance shares vest on the third anniversary of the grant, if the RONA and TSR criteria are achieved and the participant is then employed by the company. NaN percent of the performance shares vest based upon the company’s ability to achieve a predetermined RONA during the three year performance period. The remaining 50 percent of the performance shares vest based upon the company’s total TSR during the three year performance period relative to that of the company’s performance peer group.

The performance shares were granted at a target of 100%, but each performance share will reduce or increase depending on results for the performance period for the company's RONA, and the company’s TSR relative to that of the performance peer group. If the company’s RONA and TSR achieve the maximum goals, the maximum amount of shares available to be issued pursuant to the 2018 and 2019 awards are 482,234 performance shares or 150% of the 321,489 performance shares which remain outstanding. The actual number of performance shares that will ultimately vest is based on the actual percentile ranking of the company’s RONA, and the company’s TSR compared to the peer performance at the end of the performance period.

The company used the 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 are illustrated in the following table:

~~(1)Represents in-the-money options.~~


	FY 2019 Performance Awards			FY 2018 Performance Awards
Risk-free interest rate		2.45	%		2.44	%
Dividend yield		3.13	%		2.64	%
Expected volatility		41.69	%		45.11	%
Monte Carlo valuation		99.62	%		97.39	%
Closing stock price on the date of grant	$	15.34		$	18.15

The non-vested performance share award activity for the nine months ended September 30, 2019, is as follows:


	Performance ‎Shares	Weighted- ‎Average Grant- ‎Date Fair Value		Weighted-Average ‎Remaining ‎Vesting Term ‎(in years)
Non-Vested at December 31, 2018	134,022	$	17.92
Granted	216,703		15.43
Forfeited	(29,236)		16.23
Non-Vested at September 30, 2019	321,489	$	16.39	2.1

Stock Options

There remains 128,750 exercisable stock options outstanding at September 30, 2019, with a weighted-average exercise price of $12.72. The weighted average exercise price for options exercisable at September 30, 2019 was above the company’s stock price at September 30, 2019. The weighted-average remaining contractual term of exercisable options was 0.2 years at September 30, 2019.

Option awards allow employees to exercise options through cash payment for the shares of common stock or simultaneous broker-assisted transactions in which the employee authorizes the exercise and immediate sale of the shares in the open market. The company uses newly issued shares of common stock to satisfy its stock-based payment obligations.

~~Restricted Stock~~

~~The non-vested stock award and deferred stock unit activity for the nine months ended September 30, 2018, 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, 2017
1,068,947

$
20.41

Granted
664,642

18.20

Forfeited
(14,272)

20.64

Vested
(541,586)

20.58

Non-Vested at September 30, 2018
1,177,731

$
19.08

1.9

~~Performance Shares~~

On March 19, 2018, the board of directors granted 153,030 performance shares to be awarded in the form of common stock to certain participants of the plan. Performance shares vest based on the company's average return on net assets (RONA) and the company’s total shareholder return (TSR), as further described herein. The performance shares vest on March 19, 2021, if the RONA and TSR criteria are achieved and the participant is then employed by the company. Fifty percent of the performance shares vest based upon the company’s ability to achieve a predetermined RONA during the three year performance period. The remaining fifty percent of the performance shares vest based upon the company’s total TSR during the three year performance period relative to that of the company’s performance peer group.

The performance shares were granted at a target of 100%, but each performance share will increase or decrease depending on results for the performance period for the company's RONA, and the company’s TSR relative to that of the performance peer group. If the company’s RONA and TSR achieve the maximum goals, the maximum amount of shares available to be issued pursuant to this award is 229,545 performance shares or 150% of the 153,030 performance shares granted on March 19, 2018. The actual number of performance shares that will ultimately vest is based on the actual percentile ranking of the company’s RONA, and the company’s TSR compared to the peer performance at the end of the performance period.


	~~Nine Months Ended September 30, 2018~~
~~Risk-free interest rate~~	~~2.44~~	%
~~Dividend yield~~	~~2.64~~	%
~~Expected volatility~~	~~45.11~~	%

The Monte Carlo valuation also estimated the number of performance shares that would be awarded which is reflected in the fair value on the grant date. The Monte Carlo valuation assumed 97.39% of the performance shares granted on March 19, 2018, would be awarded on March 19, 2021, based upon the estimated company’s total shareholder return relative to peer performance. The company’s closing stock price was $18.15 on the date of the grant.

At September 30, 2018, unrecognized stock compensation expense of $2.3 million, excluding any potential forfeitures, will be recognized over the vesting period of these performance share awards on a straight-line basis.

Green Plains Partners

Green Plains Partners ~~adopted the LTIP, an~~has 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 ~~based on units~~awards to employees, consultants and directors to encourage superior performance. The ~~incentive plan~~LTIP reserves 2,500,000 common limited partner units for issuance in the form ofoptions, restricted units, phantom units, ~~distributable~~distribution equivalent rights, substitute awards, unit appreciation rights, unit awards, ~~profits~~profit interest units or other unit-based awards. The partnership measures unit-based compensation at fair value on the grant date, with no adjustments for estimated forfeitures. The partnership records noncash compensation expense related to ~~equity~~the awards ~~in its consolidated financial statements~~ over the requisite service period on a straight-line basis.

The non-vested unit-based awards activity for the nine months ended September 30, ~~2018,~~2019, 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, 2017
11,549

$
19.06

Granted
18,582

16.96

Forfeited
-

-

Vested
(11,549)

19.06

Non-Vested at September 30, 2018
18,582

$
16.96

0.8


	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, 2018	18,582	$	16.96
Granted	22,856		14.00
Vested	(18,582)		16.96
Non-Vested at September 30, 2019	22,856	$	14.00	0.8

Stock-Based and Unit-Based Compensation Expense

Compensation costs for stock-based and unit-based payment plans during the three and nine months ended September 30, ~~2018,~~2019 were approximately ~~$3.3~~$2.6 million and ~~$8.7~~$7.4 million, respectively, and $3.3 million and ~~$8.8~~$8.7 million during the three and nine months ended September 30, ~~2017, respectively.~~2018. At September 30, ~~2018,~~2019, there was ~~$14.2~~$13.6 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested ~~awards, excluding performance shares noted above.~~awards. This compensation is expected to be recognized over a weighted-average period of approximately 1.8 years. The potential tax benefit related to stock-based payment is approximately ~~24.5%~~24.8% of these expenses.

11. 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 computed 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. In addition, due to the presentation of GPCC as discontinued operations, the company has presented basic and diluted earnings per share from both continuing operations and from discontinued operations.

‎

The basic and diluted EPS are calculated as follows (in ~~thousands)~~thousands, except per share amounts):

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018

2017

2018

2017
Basic EPS:

Net income (loss) attributable to Green Plains
$
(12,469)

$
34,394

$
(37,580)

$
14,431
Weighted average shares outstanding - basic

40,229

41,348

40,189

40,008
EPS - basic
$
(0.31)

$
0.83

$
(0.94)

$
0.36

Diluted EPS:

Net income (loss) attributable to Green Plains
$
(12,469)

$
34,394

$
(37,580)

$
14,431
Interest and amortization on convertible debt, net of tax effect:

3.25% notes due 2018

-

840

-

3,582
4.125% notes due 2022

-

2,050

-

6,089
Net income (loss) attributable to Green Plains - diluted
$
(12,469)

$
37,284

$
(37,580)

$
24,102

Weighted average shares outstanding - basic

40,229

41,348

40,189

40,008
Effect of dilutive convertible debt:

3.25% notes due 2018

-

3,178

-

4,551
4.125% notes due 2022

-

6,071

-

6,071
Effect of dilutive stock-based compensation awards

-

50

-

63
Weighted average shares outstanding - diluted

40,229

50,647

40,189

50,693
EPS - diluted
$
(0.31)

$
0.74

$
(0.94)

$
0.48


	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2019		2018		2019		2018
Numerator:
Net loss from continuing operations ⁽¹⁾	$	(42,363)	$	(12,936)	$	(128,077)	$	(49,415)
Net income from discontinued operations		3,393		467		966		11,835
Net loss attributable to Green Plains	$	(38,970)	$	(12,469)	$	(127,111)	$	(37,580)

Denominator:
Weighted-average shares outstanding - basic		36,913		40,229		39,092		40,189
Dilutive effect of convertible debt and stock-based compensation ⁽²⁾		-		-		-		-
Weighted-average shares outstanding - diluted		36,913		40,229		39,092		40,189

EPS - basic and diluted:⁽³⁾
EPS from continuing operations	$	(1.15)	$	(0.32)	$	(3.28)	$	(1.23)
EPS from discontinued operations		0.09		0.01		0.03		0.29
EPS	$	(1.06)	$	(0.31)	$	(3.25)	$	(0.94)

Anti-dilutive weighted-average convertible debt and stock-based compensation⁽²⁾		13,983		10,348		9,397		10,154

~~Excluded~~(1)Net loss from continuing operations can be recalculated from our consolidated statements of operations by taking the ~~computation of diluted EPS were 10.3 million and 10.2 million shares~~net loss from continuing operations including noncontrolling interest less net income attributable to noncontrolling interests.

(2)The effect related to the ~~effect of the~~company’s convertible debt and stock-based compensation awards have been excluded from diluted EPS for the ~~three and nine months ended September 30, 2018,~~periods presented as the inclusion of these shares would have been antidilutive.

(3)GAAP requires the denominator used in the diluted net EPS calculation for discontinued operations to be the same as that of continuing operations, regardless of net earnings (loss) from continuing operations.

‎

12. STOCKHOLDERS’ EQUITY

Components of stockholders’ equity for the three and nine months ended September 30, 2019 and 2018 are as follows (in thousands):

Accum.

Total

Additional

Other

Green Plains
Non-
Total

Common Stock
Paid-in
Retained
Comp.
Treasury Stock
Stockholders'
Controlling
Stockholders'

Shares
Amount
Capital
Earnings
Income
Shares
Amount
Equity
Interests
Equity

Balance, December 31, 2017
46,410
$
46
$
685,019
$
325,411
$
(13,110) 5,326
$
(55,184)
$
942,182
$
116,954
$
1,059,136
Reclassification of certain
tax effects from other
comprehensive loss (Note 1)
-

-

-

2,787

(2,787)
-

-

-

-

-
Balance, January 1, 2018
46,410

46

685,019

328,198

(15,897) 5,326

(55,184)

942,182

116,954

1,059,136
Net income (loss)
-

-

-

(37,580)

-
-

-

(37,580)

14,457

(23,123)
Cash dividends and
distributions declared
-

-

-

(14,536)

-
-

-

(14,536)

(16,385)

(30,921)
Other comprehensive loss
before reclassification
-

-

-

-

(1,522)
-

-

(1,522)

-

(1,522)
Amounts reclassified from
accumulated other
comprehensive loss
-

-

-

-

243
-

-

243

-

243
Other comprehensive loss,
net of tax
-

-

-

-

(1,279)
-

-

(1,279)

-

(1,279)
Modification of 3.25% convertible
notes due 2019
-

-

4,660

-

-
-

-

4,660

-

4,660
Exchange of 3.25% convertible
notes due 2018
-

-

-

-

-
-

1

1

-

1
Stock-based compensation
321

1

5,314

-

-
-

-

5,315

196

5,511
Stock options exercised
15

-

150

-

-
-

-

150

-

150
Balance, September 30, 2018
46,746
$
47
$
695,143
$
276,082
$
(17,176) 5,326
$
(55,183)
$
898,913
$
115,222
$
1,014,135



								Accum.					Total
				Additional				Other					Green Plains		Non-		Total
	Common Stock			Paid-in		Retained		Comp.		Treasury Stock			Stockholders'		Controlling		Stockholders'
	Shares	Amount		Capital		Earnings		Income		Shares	Amount		Equity		Interests		Equity

Balance, January 1, 2019	46,638	$	47	$	696,222	$	324,728	$	(16,016)	5,536	$	(58,162)	$	946,819	$	116,170	$	1,062,989
Net income (loss)	-		-		-		(42,799)		-	-		-		(42,799)		4,928		(37,871)
Cash dividends and ‎distributions declared	-		-		-		(4,847)		-	-		-		(4,847)		(5,487)		(10,334)
Other comprehensive loss ‎before reclassification	-		-		-		-		(6,883)	-		-		(6,883)		-		(6,883)
Amounts reclassified from ‎ accumulated other ‎comprehensive loss	-		-		-		-		10,376	-		-		10,376		-		10,376
Other comprehensive income, ‎net of tax	-		-		-		-		3,493	-		-		3,493		-		3,493
Proceeds from disgorgement of shareholders short-swing profits, net⁽¹⁾	-		-		5,023		-		-	-		-		5,023		-		5,023
Stock-based compensation	284		-		428		-		-	-		-		428		79		507
Balance, March 31, 2019	46,922		47		701,673		277,082		(12,523)	5,536		(58,162)		908,117		115,690		1,023,807
Net income (loss)	-		-		-		(45,342)		-	-		-		(45,342)		5,163		(40,179)
Cash dividends and ‎distributions declared	-		-		-		(4,871)		-	-		-		(4,871)		(5,487)		(10,358)
Other comprehensive loss ‎before reclassification	-		-		-		-		33,260	-		-		33,260		-		33,260
Amounts reclassified from ‎ accumulated other ‎comprehensive loss	-		-		-		-		3,440	-		-		3,440		-		3,440
Other comprehensive income, ‎net of tax	-		-		-		-		36,700	-		-		36,700		-		36,700
Issuance of 4.00% convertible notes due 2024, net of tax	-		-		22,537		-		-	-		-		22,537		-		22,537
Settlement of 3.25% convertible ‎notes due 2019, net of tax	-		-		(271)		-		-	-		-		(271)		-		(271)
Repurchase of common stock	-		-		-		-		-	3,197		(39,870)		(39,870)		-		(39,870)
Stock-based compensation	(3)		-		2,129		-		-	-		-		2,129		79		2,208
Balance, June 30, 2019	46,919		47		726,068		226,869		24,177	8,733		(98,032)		879,129		115,445		994,574
Net income (loss)	-		-		-		(38,970)		-	-		-		(38,970)		3,479		(35,491)
Cash dividends and ‎distributions declared	-		-		-		-		-	-		-		-		(5,497)		(5,497)
Other comprehensive loss ‎before reclassification	-		-		-		-		28,095	-		-		28,095		-		28,095
Amounts reclassified from ‎ accumulated other ‎comprehensive loss	-		-		-		-		(53,255)	-		-		(53,255)		-		(53,255)
Other comprehensive income, ‎net of tax	-		-		-		-		(25,160)	-		-		(25,160)		-		(25,160)
Share of equity method investees other comprehensive loss arising during the period, net of tax	-		-		-		-		(10,771)	-		-		(10,771)		-		(10,771)
Issuance of 4.00% convertible notes due 2024, net of tax	-		-		2,231		-		-	-		-		2,231		-		2,231
Repurchase of common stock	-		-		-		-		-	1,663		(16,014)		(16,014)				(16,014)
Stock-based compensation	(4)		-		2,509		-		-	-		-		2,509		81		2,590
Balance, September 30, 2019	46,915	$	47	$	730,808	$	187,899	$	(11,754)	10,396	$	(114,046)	$	792,954	$	113,508	$	906,462

‎


								Accum.					Total
				Additional				Other					Green Plains		Non-		Total
	Common Stock			Paid-in		Retained		Comp.		Treasury Stock			Stockholders'		Controlling		Stockholders'
	Shares	Amount		Capital		Earnings		Income		Shares	Amount		Equity		Interests		Equity

Balance, December 31, 2017	46,410	$	46	$	685,019	$	325,411	$	(13,110)	5,326	$	(55,184)	$	942,182	$	116,954	$	1,059,136
Reclassification of certain ‎tax effects from other ‎comprehensive loss⁽²⁾	-		-		-		2,787		(2,787)	-		-		-		-		-
Balance, January 1, 2018	46,410		46		685,019		328,198		(15,897)	5,326		(55,184)		942,182		116,954		1,059,136
Net income (loss)	-		-		-		(24,117)		-	-		-		(24,117)		4,662		(19,455)
Cash dividends and ‎distributions declared	-		-		-		(4,831)		-	-		-		(4,831)		(5,420)		(10,251)
Other comprehensive income ‎before reclassification	-		-		-		-		17,150	-		-		17,150		-		17,150
Amounts reclassified from ‎ accumulated other ‎comprehensive income	-		-		-		-		(603)	-		-		(603)		-		(603)
Other comprehensive income ‎net of tax	-		-		-		-		16,547	-		-		16,547		-		16,547
Stock-based compensation	284		1		(512)		-		-	-		-		(511)		60		(451)
Stock options exercised	5		-		50		-		-	-		-		50		-		50
Balance, March 31, 2018	46,699		47		684,557		299,250		650	5,326		(55,184)		929,320		116,256		1,045,576
Net income (loss)	-		-		-		(994)		-	-		-		(994)		4,745		3,751
Cash dividends and ‎distributions declared	-		-		-		(4,851)		-	-		-		(4,851)		(5,478)		(10,329)
Other comprehensive income ‎before reclassification	-		-		-		-		(4,277)	-		-		(4,277)		-		(4,277)
Amounts reclassified from ‎ accumulated other ‎comprehensive income	-		-		-		-		(581)	-		-		(581)		-		(581)
Other comprehensive income ‎net of tax	-		-		-		-		(4,858)	-		-		(4,858)		-		(4,858)
Exchange of 3.25% convertible ‎notes due 2018	-		-		-		-		-	-		1		1		-		1
Stock-based compensation	52		-		2,812		-		-	-		-		2,812		60		2,872
Stock options exercised	10		-		100		-		-	-		-		100		-		100
Balance, June 30, 2018	46,761		47		687,469		293,405		(4,208)	5,326		(55,183)		921,530		115,583		1,037,113
Net income (loss)	-		-		-		(12,469)		-	-		-		(12,469)		5,050		(7,419)
Cash dividends and ‎distributions declared	-		-		-		(4,854)		-	-		-		(4,854)		(5,487)		(10,341)
Other comprehensive income ‎before reclassification	-		-		-		-		(14,395)	-		-		(14,395)		-		(14,395)
Amounts reclassified from ‎ accumulated other ‎comprehensive income	-		-		-		-		1,427	-		-		1,427		-		1,427
Other comprehensive income ‎net of tax	-		-		-		-		(12,968)	-		-		(12,968)		-		(12,968)
Modification of 3.25% convertible ‎notes due 2019	-		-		4,660		-		-	-		-		4,660				4,660
Exchange of 3.25% convertible ‎notes due 2018	-		-		-		-		-	-		-		-		-		-
Stock-based compensation	(15)		-		3,014		-		-	-		-		3,014		76		3,090
Stock options exercised	-		-		-		-		-	-		-		-		-		-
Balance, September 30, 2018	46,746	$	47	$	695,143	$	276,082	$	(17,176)	5,326	$	(55,183)	$	898,913	$	115,222	$	1,014,135

(1)During the three months ended March 31, 2019, the company received $6.7 million from a shareholder of the company for disgorgement of shareholder short-swing profits under Section 16(b) under the Exchange Act. The amount was recorded as an increase to additional paid-in capital, net of tax.

(2)Effective January 1, 2018, the company early adopted the amended guidance in ASC 220, Income Statement – Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. The amendment eliminates the stranded tax effects resulting from the Tax Cuts and Jobs Act and is intended to improve the usefulness of information reported. As a result, the company recorded a $2.8 million reclassification from accumulated other comprehensive income to retained earnings during the first quarter of 2018.

‎

Amounts reclassified from accumulated other comprehensive income are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Statements of Operations	Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,				Statements of ‎Operations
	2018		2017		2018		2017		Classification	2019		2018		2019		2018		Classification
Gains (losses) on cash flow hedges:
Commodity derivatives	$	(3,197)	$	(5,242)	$	(1,749)	$	1,734	Revenues	$	-	$	4,766	$	-	$	3,648	⁽¹⁾
Commodity derivatives		1,350		(1,861)		1,451		(1,679)	Cost of goods sold		-		1,331		-		1,258	⁽²⁾
Total		(1,847)		(7,103)		(298)		55	Loss before income taxes
Income tax expense (benefit)		(420)		(2,650)		(55)		21	Income tax benefit
Total gains on cash flow hedges from continuing operations											-		6,097		-		4,906	⁽³⁾

Gains (losses) on cash flow hedges from discontinued operations, net of income taxes											53,255		(6,109)		39,439		(4,247)	⁽⁴⁾

Income tax expense											-		1,415		-		902	⁽⁵⁾
Amounts reclassified from accumulated other comprehensive income (loss)	$	(1,427)	$	(4,453)	$	(243)	$	34		$	53,255	$	(1,427)	$	39,439	$	(243)

The impact on the consolidated balance sheet as of December 31, 2018 for the adoption of the new lease standard was as follows (in thousands):


	Balance at		Adjustments		Balance at
	December 31,		Due to		January 1,
	2018		ASC 842		2019
		(audited)
Assets
Operating lease right-of-use assets	$	-	$	61,268	$	61,268
Other assets		365		(365)		-

Liabilities
Accounts payable		196		(196)		-
Operating lease current liabilities		-		18,315		18,315
Operating lease long-term liabilities		-		46,024		46,024
Other liabilities		3,240		(3,240)		-

The company’s leases do not specify an implicit interest rate. Therefore, the incremental borrowing rate was used based on information available at commencement date to determine the present value of future payments.

Practical Expedients

Under the new lease standard, companies may elect various practical expedients upon adoption. The company elected the package of practical expedients related to transition, which states that an entity need not reassess initial direct costs for existing leases, ~~certain facilities, equipment~~the lease classification for any expired or existing leases, and ~~parcels~~whether any expired or existing contracts are or contain leases.

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.

The company also elected the practical expedient for lessees to include both the lease and non-lease components as a single component and account for them as a 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 elected to combine with the monthly rental payment and account for the total cost as operating lease expense. In addition, the company has a land ~~under agreements~~lease that ~~expire at various dates. For accounting purposes, rent expense is based~~contains a non-lease component for the handling and unloading services the landlord provides. The company elected to combine the cost of services with the land lease cost and account for the total as operating lease expense.

A lessee may elect not to apply the recognition requirements in the new lease standard for short-term leases. Instead, the lease payments may be recognized into profit or loss on a straight-line ~~amortization of the total payments required~~basis over the ~~lease.~~lease term. The company ~~incurred~~has elected to use this short-term lease ~~expenses~~exemption, and therefore will not record a lease liability or right-of-use asset for leases with a term of ~~$9.0 million and~~ ~~$29.7 million during~~one year or less. The company did not incur any short-term lease expense for the three and nine months ended September 30, ~~2018, respectively,~~2019.

Lease Expense

The company leases certain facilities, parcels of land, and ~~$11.2 million~~equipment, with remaining terms ranging from less than one year to 18.2 years. The land and ~~$33.4 million~~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):


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Lease expense
Operating lease expense	$	4,944	$	15,899
Variable lease expense ⁽¹⁾		250		643
Total lease expense	$	5,194	$	16,542

(1)Represents amounts incurred in excess of the minimum payments required 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 ~~the three and nine months ended September 30, 2017, respectively.~~periods of maintenance or upgrade.

Supplemental cash flow information related to operating leases is as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2019		September 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,977	$	15,913

Right-of-use assets obtained in exchange for lease obligations:		4,427		10,634
Operating leases

Right-of-use assets and lease obligations derecognized due to lease modifications:
Operating leases		1,405		1,405

Supplemental balance sheet information related to operating leases is as follows:


	September 30,
	2019
Weighted average remaining lease term		6.7 years

Weighted average discount rate		5.44%

Aggregate minimum lease payments under ~~these~~the operating lease agreements for the remainder of ~~2018~~2019 and in future years are as follows (in thousands):


Year Ending December 31,	Amount		Amount
2018	$	9,989
2019		24,808	$	5,272
2020		18,052		18,822
2021		10,574		10,885
2022		8,252		8,924
2023				5,707
Thereafter		32,245		21,864
Total	$	103,920		71,474
Less: Present value discount				(12,378)
Lease liabilities			$	59,096

Lease Revenue

As described in Note 2 – Revenue, the majority of the partnership’s segment revenue is generated though their storage and throughput services and rail transportation services agreements with Green Plains Trade and are accounted for as lease revenue. Leasing revenues do not represent revenues recognized from contracts with customers under ASC 606, and are accounted for under ASC 842, Leases. Lease revenue associated with agreements with Green Plains Trade are eliminated upon consolidation. The remaining lease revenue is not material to the company.

Refer to Note 2 – Revenue for further discussion on lease revenue.

Commodities

As of September 30, ~~2018,~~2019, the company had contracted future purchases of grain, corn oil, natural gas, crude oil, ethanol and distillers grains, ~~and cattle,~~ valued at approximately ~~$411.9~~$271.7 million.

Legal

In November 2013, the company acquired two ethanol plants located in Fairmont, Minnesota and Wood River, Nebraska. There is ongoing litigation related to the consideration for this acquisition. On August 19, 2016, the Delaware Superior Court granted Green Plains’ motion for summary judgment in part and held that the seller’s attempt to disclaim liability for certain shortfall amounts through the use of a disclaimer provision was ineffective. Based on the court order, the company determined that previously accrued contingent liabilities of approximately $6.3 million no longer represented probable losses. These accruals were reversed as a reduction of cost of goods sold during the year ended December 31, 2016, because the adjustment relates to a reduction in the cost of inventory purchased in the acquisitions. Per the court’s direction, the company and the seller retained an independent accounting firm to determine if a shortfall exists and the precise shortfall due to Green Plains. The accounting firm has concluded that a shortfall does exist consistent with the company’s calculations, and the matter is now back in the hands of the Court to review and enter its order. On October 30, 2018, the ongoing litigation was settled and will be recorded in the fourth quarter.

~~In addition to the above-described proceeding, the~~ company is currently involved in litigation that has arisen induring 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.

15. RELATED PARTY TRANSACTIONS

~~Commercial Contracts~~Green Plains Cattle Company LLC

~~In March 2014, a subsidiary of the~~The company entered into $1.4 million of new equipment financing agreements with Amur Equipment Finance, whom Gordon Glade, a member of the company’s board of directors, was formerly a shareholder. Amur Equipment Finance is no longer considered aengages in certain related party astransactions with GPCC. The company provides a variety of ~~the third quarter of 2018.~~ ~~Balances of $0.4 million~~shared services to GPCC, including general management, accounting and ~~$0.6~~finance, payroll and human resources, information technology, legal, communications and treasury activities. The company reduced selling, general and administrative expenses by $0.1 million related to these financing arrangements were included in debt at September 30, 2018, and December 31, 2017, respectively. Payments, including principal and interest, totaled $69 thousand and $207 thousand during each ofshared services provided for the three and nine months ended September 30, ~~2018,~~2019. The company had $0.5 million outstanding receivables related to the shared service agreement and ~~2017, respectively.~~ ~~The weighted average interest rate~~expenses paid on behalf of GPCC as of September 30, 2019.

Green Plains Trade Group, a subsidiary of the company, enters into certain sale contracts with GPCC during the normal course of business. Revenues subsequent to the disposition of GPCC were $0.7 million for both the ~~financing agreements with Amur Equipment Finance was 6.8%.~~three and nine months ended September 30, 2019.

Aircraft Leases

Effective January 1, 2015, the company entered into ~~two~~2 agreements with an entity controlled by Wayne Hoovestol for the lease of ~~two~~2 aircrafts. Mr. Hoovestol is chairman of the company’s board of directors. The company agreed to pay $9,766 per month for the combined use of up to 125 hours per year of the aircrafts. Flight time in excess of 125 hours per year will incur additional hourly charges. Payments related to these leases totaled ~~$39~~$37 thousand and ~~$126 thousand during the three months ended September 30, 2018, respectively, and $39 thousand and $141~~$106 thousand during the three and nine months ended September 30, ~~2017,~~2019, and $39 thousand and $126 thousand during the three and nine months ended September 30, 2018, respectively. The company had no outstanding payables related to these agreements as of September 30, ~~2018,~~2019 and ~~$2 thousand in outstanding payables related to these agreements as of~~ December 31, ~~2017.~~2018.

16. ~~SUBSEQUENT EVENTS~~EQUITY METHOD INVESTMENTS

~~Seventh Amendment to Credit Agreement –~~ Green Plains Cattle Company LLC

On October 5, 2018, the company amended its revolving credit facility to provide the Joint Administrator, at its sole discretion, irrevocable authorization to (1) release any term loan priority collateral; (2) release any guarantor related to any release of any term loan priority collateral and/or (3) release the guaranty upon termination of the term loan agreement and repayment of all obligations owed by the company under the term loan agreement.

~~Asset Purchase Agreement – Valero Renewable Fuels Company, LLC and~~September 9, 2019, Green Plains, ~~Partners LP~~

~~On October 8, 2018,~~TGAM and StepStone announced the ~~company~~formation of a joint venture. Such parties entered into ~~an Asset Purchase~~the Second Amended and Restated Limited Liability Company Agreement ~~to sell three~~ of its ethanol plants located in Bluffton, Indiana, Lakota, Iowa, and Riga, Michigan to Valero Renewable Fuels Company, LLC (“Valero”). The estimated sales price for the facilities is $300 million plus approximately $22 millionGPCC effective as of ~~related working capital. Correspondingly, the company~~September 1, 2019. GPCC was previously a wholly owned subsidiary of Green Plains. Green Plains also entered into a ~~separate Asset~~Securities Purchase Agreement ~~(the “Asset Purchase Agreement”)~~ with TGAM and StepStone, whereby TGAM and StepStone purchased an aggregate of 50% of the ~~partnership for $120.9 million (the “Transaction”), subject to certain other post-closing adjustments, to acquire the related storage assets to be disposed~~membership interests of GPCC from Green Plains. After closing, GPCC is no longer consolidated in the ~~sale~~company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. GPCC results prior to ~~Valero. In addition, approximately 525~~its disposition are classified as discontinued operations in our current and prior period financials.

The GPCC investment is accounted for using the equity method of accounting. GPCC conducts the business of the ~~3,500 railcars leased~~joint venture, including (i) owning and operating the cattle feeding operations (as defined below), and (ii) any other activities approved by GPCC’s board of managers. GPCC continues to have the ~~partnership~~capacity to support 355,000 head of cattle and has

approximately 11.7 million bushels of grain storage capacity. Historical GPCC operational results prior to its disposition are ~~anticipated to be conveyed to~~recorded as discontinued operations in the consolidated balance sheet and statements of operations.

The company asdoes not consolidate any part of the ~~Transaction. Upon closing~~assets or liabilities or operating results of its equity method investee. The company’s share of net income or loss in the investee increases or decreases, as applicable, the carrying value of the ~~Transaction,~~investment. With respect to GPCC, the company ~~anticipates recording~~determined that this entity does not represent a variable interest entity and consolidation is not required. In addition, although the company has the ability to exercise significant influence over the joint venture through board representation and voting rights, all significant decisions require the consent of the other investors without regard to economic interest.

Summarized Financial Information

During the periods ended September 30, 2019 and December 31, 2018, our equity method investees were considered related parties and included:

Green Plains Cattle Company LLC, a joint venture formed on September 1, 2019, in which we have a 50% noncontrolling interest. See description of GPCC above.

JGP Energy Partners LLC, in which we have a 50% noncontrolling interest. JGP Energy Partners LLC operates an ~~estimated pre-tax gain~~intermodal export and import fuels terminal in Beaumont, Texas, with storage capacity of 550 thousand barrels to support various export and domestic grades of ethanol.

Optimal Aqua LLC, in which we have a 50% noncontrolling interest. Optimal Aqua LLC produces high-quality aquaculture feeds utilizing proprietary techniques and high-protein feed ingredients.

NLR Energy Logistics LLC, in which the partnership has a 50% noncontrolling interest. NLR Energy Logistics LLC operates a unit train terminal in the Little Rock, Arkansas area with capacity to unload 110-unit cars and provide approximately ~~$100 million.~~ 100,000 barrels of storage.

Our equity method investments are summarized in the following table (in thousands):


	Ownership as of September 30, 2019	September 30, 2019		December 31, 2018
Green Plains Cattle Company LLC	50%	$	63,066	$	-
JGP Energy Partners LLC	50%		25,145		25,362
Optimal Aqua LLC	50%		640		704
NLR Energy Logistics LLC	50%		4,178		3,648
Total		$	93,029	$	29,714

Earnings from equity method investments were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30
	2019		2018		2019		2018
Green Plains Cattle Company LLC	$	504	$	-	$	504	$	-
NLR Energy Logistics LLC		173		48		530		(82)
All others		(33)		(298)		(500)		(407)
Total income (loss) from equity method investments	$	644	$	(250)	$	534	$	(489)

Distributions from equity method investments	$	-	$	-	$	-	$	-

Earnings from equity method investments, net of distributions	$	644	$	(250)	$	534	$	(489)

The company ~~anticipates using proceeds from~~reports its proportional share of equity method investment income (loss) in the ~~Transaction to repay its term debt.~~

consolidated statements of operations. The ~~partnership will receive approximately 8.9 million units owned by the company as payment. The Asset Purchase Agreement provides for the closing~~company’s share of ~~the Transaction to occur immediately prior to the company’s sale to Valero.~~

The company and the partnership agreed, upon closing, to extend the storage and throughput services agreement with Green Plains Trade an additional three years to June 30, 2028. Upon closing, the quarterly minimum volume commitment associated with the storage and throughput services agreement will be 235.7 million gallons or, approximately 80% of the new Green Plains annual production capacity of 1.183 billion gallons.

~~The aforementioned transactions are anticipated to close~~equity method investees other comprehensive income arising during the ~~fourth quarter~~period is included in accumulated other comprehensive loss in the accompanying balance sheet.

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The following tables present summarized financial information of ~~2018, subject to customary closing conditions and regulatory approvals.~~GPCC.

~~Third Amendment to Credit Agreement – Green Plains Operating Company LLC~~


	One Month Ended September 30,
	2019
Total revenues	$	86,932
Total operating expenses		85,925
Net income	$	1,007


	September 30, 2019
Balance sheet:
Current assets	$	452,604
Noncurrent assets		75,046
Current liabilities		401,034
Noncurrent liabilities		484
Net assets	$	126,132

On October 12, 2018, the partnership amended its revolving credit facility to allow the sale of the ethanol storage assets associated with up to six ethanol plants owned by Green Plains with no more than 600 million gallons of production capacity. Upon close of such sale, the revolving credit facility available will be decreased from $235 million to $200 million. In

‎

addition, the lenders permitted the exchange of units as consideration for the transaction and also permitted modifications of various key operating agreements. There were no other significant changes in other covenants.

~~Stock Purchase Agreement – Kerry Holding Co.~~

On October 23, 2018, the company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Kerry Holding Co. to sell all of the issued and outstanding capital stock of Fleischmann’s Vinegar Company, Inc. for $350 million in cash, subject to certain post-closing working capital adjustments. Upon closing of the transaction, the company anticipates recording an estimated pre-tax gain of approximately $62 million. The company anticipates using proceeds from the transaction to repay its term debt.

The closing of the transaction, which is expected to occur during the fourth quarter of 2018, is subject to customary closing conditions and regulatory approvals. The Stock Purchase Agreement contains normal and customary representations and warranties, and indemnification obligations.

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

General

The following discussion and analysis provides information we believe is relevant to understand our consolidated financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements contained in this report ~~and other quarterly reports filed with the SEC after December 31, 2017,~~ together with our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Cautionary Information Regarding Forward-Looking Statements

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 Part I, Item 1A – Risk Factors of our annual report on Form 10-K for the year ended December 31, ~~2017, in Part II – Risk Factors of this report,~~2018, or incorporated by reference. Specifically, we may experience ~~significant~~ fluctuations in future operating results due to a number of economic conditions, including: competition in the ethanol industry and other industries in which we operate; commodity market risks, including those that may result from weather conditions; financial market risks; counterparty risks; risks associated with changes to government policy or regulation, including changes to tax laws; risks related to ~~acquisitions~~acquisition and disposition activities and achieving anticipated results; risks associated with merchant trading, cattle feeding ~~operations, vinegar production;~~operations; risks related to our ~~portfolio optimization strategy~~equity method investees and other ~~risk~~ factors detailed in reports filed with the SEC. Additional risks related to Green Plains Partners LP include compliance with commercial contractual obligations, potential tax consequences related to our investment in the partnership and risks disclosed in the partnership’s SEC filings associated with the operation of the partnership as a separate, publicly traded entity.

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 ~~nor~~and do wenot 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.

Overview

Green Plains is a diversified commodity-processing business with operations ~~related to ethanol production,~~that include corn processing, grain handling and storage ~~cattle feedlots, food ingredients,~~ and commodity marketing and logistics services. The company is one of the leading corn processors in the world and, through its adjacent businesses, is focused on the production of high-protein feed ingredients and export growth opportunities. We are also focused on generating stable operating margins through our ~~diversified business segments and~~ risk management strategy. Green Plains Partners LP is our primary downstream logistics provider, storing and delivering the ethanol we produce. ~~As of September 30, 2018, we~~We own a ~~62.4%~~49.1% limited partner interest, a 2.0% general partner interest and all of the partnership’s incentive distribution rights. The public owns the remaining ~~35.6%~~48.9% limited partner interest. The partnership is consolidated in our financial statements. In addition, Green Plains owns a 50% interest in Green Plains Cattle Company LLC.

We are currently undergoing a number of project initiatives to improve margins. Through our Project 24 initiative, we anticipate reductions in operating expense per gallon across our non-ICM plants as a result of these investments. In addition, through our high-protein initiative, we expect to achieve increased margins per gallon as a result of the ability to produce various high protein animal feed products. The first installation is expected to be completed at our Shenandoah plant towards the end of 2019, with dried product available for distribution during the first quarter of 2020. The remaining locations will be completed over the course of the next three to four years.

‎

Recent Developments

~~Stock Purchase~~Disposition of Green Plains Cattle Company LLC

On September 9, 2019, the company, TGAM Agribusiness Fund Holdings-B LP (“TGAM”) and StepStone Atlantic Fund, L.P. (“StepStone”) announced the formation of a joint venture. Such parties entered into the Second Amended and Restated Limited Liability Company Agreement ~~– Kerry Holding Co.~~

~~On October 23, 2018, we~~of Green Plains Cattle Company LLC (“GPCC”) on September 6, 2019, effective as of September 1, 2019. GPCC was previously a wholly owned subsidiary of Green Plains. The company also entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Kerry Holding Co. to sell all of the issued and outstanding capital stock of Fleischmann’s Vinegar Company, Inc. for $350 million in cash, subject to certain post-closing working capital adjustments. Upon closing of the transaction, we anticipate recording an estimated pre-tax gain of $62 million. We anticipate using proceeds from the transaction to repay our term debt.

~~Extension of Offer Period – JGP Energy Partners~~

Effective October 15, 2018, we agreed with the partnership to extend the offer period related to the potential purchase of the Green Plains interest in the JGP Energy Partners Beaumont, Texas terminal until June 30, 2019.

~~Third Amendment to Credit Agreement – Green Plains Operating Company LLC~~

On October 12, 2018, the partnership amended the revolving credit facility to allow the sale of the ethanol storage assets of up to six ethanol plants owned by Green Plains with no more than 600 million gallons of production capacity. Upon close of such sale, the revolving credit facility available will be decreased from $235 million to $200 million. In addition, the lenders permitted the exchange of units as consideration for the transaction and also permitted modifications of various key operating agreements. There were no other significant changes in other covenants.

~~Asset Purchase Agreement – Valero Renewable Fuels Company, LLC and Green Plains Partners LP~~

On October 8, 2018, we entered into an Asset Purchase Agreement to sell three of our ethanol plants located in Bluffton, Indiana, Lakota, Iowa, and Riga, Michigan to Valero Renewable Fuels Company, LLC (“Valero”). The estimated sales price for the facilities is $300 million plus approximately $22 million of related working capital. Correspondingly, we entered into a separate Asset Purchase Agreement (the “Asset Purchase Agreement”) with the partnership for $120.9 million (the “Transaction”), subject to certain other post-closing adjustments, to aquire the related storage assets to be disposed of in the sale to Valero. In addition, approximately 525 of the 3,500 railcars leased by the partnership are anticipated to be conveyed to the company as part of the Transaction. Upon closing of the Transaction, we anticipate recording an estimated pre-tax gain of approximately $100 million. We anticipate using proceeds from the transaction to repay our term debt.

The partnership will receive approximately 8.9 million units owned by the company as payment. The Asset Purchase Agreement provides for the closing of the Transaction to occur immediately prior to the company’s sale to Valero.

We have agreed with the partnership, upon closing, to extend the storage and throughput services agreement with Green Plains Trade an additional three years to June 30, 2028. Upon closing, the quarterly minimum volume commitment associated with the storage and throughput services agreement will be 235.7 million gallons or, approximately 80% of the new Green Plains annual production capacity of 1.183 billion gallons.

~~The aforementioned transactions are anticipated to close during the fourth quarter of 2018, subject to customary closing conditions and regulatory approvals.~~

~~Seventh Amendment to Credit Agreement – Green Plains Cattle Company~~

~~3.25% Convertible Notes due 2018~~

~~On October 1, 2018, upon maturity, the remaining aggregate principal of $6.9 million related to the 3.25% notes due in 2018 was settled in cash.~~

~~Bartlett Cattle Company, L.P. Aquisition~~

~~On July 27, 2018, we entered into an asset purchase agreement to acquire two feeding operations from Bartlett Cattle Company, L.P. for $16.2 million,~~ ~~plus working capital of approximately $106.6 million. The transaction includes two feed yards located in Sublette, Kansas and Tulia, Texas and will add combined feedlot capacity of 97,000 head of cattle to the company’s operations.~~ The transaction will be financed using cash on hand and proceeds from the Green Plains Cattle senior secured asset-based revolving credit facility. The transaction closed on August 1, 2018 following receipt of regulatory approval.

~~DKGP Energy Terminals LLC Membership Interest~~Securities Purchase Agreement with ~~AMID Merger LP Termination~~

~~On February 16, 2018, the partnership~~TGAM and ~~Delek Logistics Partners LP formed DKGP Energy Terminals LLC, a 50/50 joint venture, to acquire~~StepStone, whereby TGAM and ~~manage light products terminal assets in Texas and Arkansas. In conjunction with the formation~~StepStone purchased an aggregate of ~~the joint venture, DKGP executed a membership interest purchase agreement with AMID Merger LP, to acquire all~~50% of the membership interests of ~~AMID Refined Products LLC (“AMID”)~~GPCC from the company. After closing, GPCC is no longer included in the consolidated financial statements and the GPCC investment is accounted for ~~approximately $138.5 million. Due to regulatory obstacles,~~using the equity method of accounting. Under this method, an investment is recorded at the acquisition cost plus the company’s share of equity in undistributed earnings or losses since acquisition and the company’s share of equity method investees other comprehensive income arising during the period, reduced by distributions received and the amortization of excess net investment. The company recognizes this investment on ~~August 1, 2018, DKGP Energy Terminals LLC notified AMID Merger LP~~a separate line item in the consolidated balance sheet and recognizes its proportionate share of earnings on a separate line item in the consolidated statement of operations. The company does not consolidate any part of the assets or liabilities or operating results of its ~~termination~~equity method investees. Additionally, the company concluded that the disposition of GPCC met the requirements under ASC 205-20 Presentation of Financial Statements – Discontinued Operations (“ASC 205-20”). As such, GPCC results prior to its disposition are classified as discontinued operations in our current and prior period consolidated financial statements. See Note 3 - Acquisitions, Dispositions and Discontinued Operations for further details.

Under the LLC Agreement, the company has certain rights and obligations, including but not limited to, the right or obligation: (i) to designate two Managers to the Board of Managers of GPCC (the “Board”), or in the event the size of the ~~membership~~Board is increased, the number of Managers equal to two-fifths of the Board, rounded up, and (ii) to fund additional capital contributions in accordance with their percentage interest ~~purchase agreement.~~upon mutual agreement by the company TGAM and StepStone. Additionally, TGAM and StepStone both have the right or obligation to designate one Manager, or in the event the size of the Board is increased, the number of Managers equal to one-fifths of the Board, rounded up. Each Manager serving on the Board shall have one vote and a majority of the Managers serving on the Board shall constitute a quorum for the transaction of business of the Board. The company’s allocation under the LLC Agreement will be subject to certain adjustments.

Disposition of JGP Energy Partners

On October 28, 2019, the company signed a definitive agreement to sell its 50% joint venture interest in Jefferson Energy Companies fuels terminal to its partner Jefferson Energy Holdings LLC, a subsidiary of Fortress Transportation and Infrastructure Investors LLC for $29 million, plus the company’s proportional share of working capital. The transaction is expected to close on or before December 15, 2019.

Increase of Share Repurchase Authorization

On October 30, 2019, the company’s board of directors authorized an additional $100 million share repurchase taking the previously authorized amount from $100 million to $200 million.

Results of Operations

During the third quarter of ~~2018, our~~2019, we continued to experience a weak ethanol margin environment. Our operating strategy, including the operating cost savings initiative, is to increase utilization rates and efficiency while reducing operating expenses to achieve improved margins in the current environment. As a result, capacity utilization increased from an average ~~utilization rate was approximately 81.3~~%of 80.0% of capacity ~~resulting~~ in ~~ethanol~~the second quarter to 84.2% of capacity in the third quarter. Ethanol production ~~of 304.8~~was 238.5 mmg for the third quarter of ~~2018,~~2019, compared with ~~313.6~~304.8 mmg ~~or 83.7% of capacity,~~ for the same quarter last year. We expect to continue to ~~evaluate~~run at higher average utilization rates to achieve the cost savings anticipated. Additionally, overall performance at our ~~production run rates~~ethanol plants was negatively impacted by severe weather and ~~will flex our production depending on market conditions.~~ associated flooding in areas where we transport products during the first half of 2019. The weather also drove corn prices up, negatively impacting margins.

U.S. Ethanol Supply and Demand

According to the EIA, domestic ethanol production averaged ~~1.06~~1.02 million barrels per day during the third quarter of ~~2018,~~2019, which was ~~slightly higher~~4% lower than the ~~1.04~~1.06 million barrels for the ~~previous quarter, but 3.0% higher than the same~~third quarter of last year. ~~Year-to-date, production volumes are up 2.2% in 2018 compared with the same period in 2017.~~ Refiner and blender input volume increased ~~slightly~~1% to ~~932~~941 thousand barrels per day for the third quarter of ~~2018~~2019, compared with ~~931~~932 thousand barrels per day for the same quarter last year. Gasoline demand ~~was down~~for the third quarter of 2019 increased slightly by 697 thousand barrels per day, inor

0.1% compared to the same quarter last year. U.S. domestic ethanol ending stocks decreased by approximately 0.2 million barrels, or 1%, to 23.2 million barrels for the third quarter of ~~2018 or 0.7% compared~~2019. At the end of May 2019, the EPA finalized regulatory changes to apply the ~~same period~~1 pound per square inch Reid Vapor Pressure (RVP) waiver that currently applies to E10 during the summer months so that it applies to E15 as well. This removes a ~~year ago.~~significant barrier to wider sales of E15 in the summer months, thus expanding the market for ethanol in transportation fuel. As of September 30, ~~2018,~~2019, there were ~~1,628~~approximately 1,970 retail stations selling E15 in 30 states, up from ~~1,210~~1,700 at the beginning of the year, according to Growth Energy. ~~Ethanol futures traded at an average discount of $0.71 to RBOB during the third quarter of 2018 related to weaker ethanol demand.~~ ~~U.S. domestic ethanol ending stocks~~ ~~increased by approximately 1.9 million barrels to 23.4 million barrels on September 30, 2018, year over year.~~

Global Ethanol Supply and Demand

According to the USDA Foreign Agriculture Service, ~~year-to-date~~ domestic ethanol exports through ~~September 30, 2018,~~August 31, 2019 were ~~1.24~~approximately 1.00 bg, ~~up 25%,~~down 13% from ~~992.9~~ ~~mmg~~1.15 bg for the ~~comparable~~same period ~~in 2017.~~of 2018. Brazil remained the largest export destination for U.S. ethanol, which accounted for ~~30%~~25% of domestic ethanol export volume despite the 20% tariff on U.S. ethanol imports in excess of 150 million liters, or 39.6 million gallons per quarter, imposed in September 2017 by Brazil’s Chamber of Foreign Trade, or CAMEX. In a resolution published August 31, 2019, Brazil raised the annual import quota to 750 million liters, or 198 million gallons per year from the expiring 600 million-liter limit. The final resolution awaits approval of the Brazilian government. In addition, Canada, India, ~~and~~ South Korea, and the Philippines accounted for 21%, 7%13%, 6%, and 5%, respectively, of U.S. ethanol exports.

On April 1, 2018, China announced it would add an additional 15% tariff to the existing 30% tariff it had earlier imposed on ethanol imports from the United States and Brazil. China later raised the tariff further to 70% as the trade war escalated. There continues to be negotiations between the U.S. and China with no certainty of when a trade agreement may be reached.

The cost to produce the equivalent amount of starch found in sugar from $3.50-per-bushel corn is 7 cents per pound. The average price of sugar ~~was~~remained at approximately 1213 cents per pound during the third quarter of ~~2018, compared with an average of 15 cents per pound for 2017.~~2019. We currently estimate that net ethanol exports will reach between ~~1.6~~1.4 billion gallons and ~~1.7~~1.5 billion gallons in ~~2018~~2019 based on historical demand from a variety of countries and certain countries who seek to improve their air quality and eliminate MTBE from their own fuel supplies.

~~U.S. Protein~~Co-Product Supply and Demand

During the third quarter of ~~2018,~~2019, the market sentiment for cattle ~~continued to be optimistic~~feeding came under pressure as beef packing capacity contracted due to ~~anticipated lower cost~~the loss of ~~feed, strong domestic beef consumption~~a Kansas packing plant after a fire in August. However, as other packing plants increased hours of operations, the effects from the loss of the Kansas plant have been reduced. Feeder supplies have remained robust following a brief slowdown when cattle prices weakened following the plant fire, and ~~robust export demand~~it looks like feeder supplies for ~~beef. Corn prices remained on~~ the ~~lower end of their 2018 range, according to the Chicago Mercantile Exchange.~~fourth quarter will be sufficient. Domestic beef consumption per capita in ~~2018~~2019 is projected to be steady with 2018 at 57.2 pounds, but that number is expected to increase ~~0.8 pound~~in 2020 to 57.7 pounds ~~per person compared with 2017.~~according to the USDA. Export demand for beef is forecasted to ~~increase~~decrease approximately ~~10.6%~~1.1% in ~~2018~~2019 compared with ~~2017~~2018 according to the USDA.Total fed cattle marketings through the end of August 2019 increased 1.5% compared with the first eight months of 2018.

Cow-calf operations continue to be profitable, which has supported a period of expansion. ~~Since~~Excellent pasture conditions after a wet winter and spring will help the ~~fourth quarter~~profitability of ~~2017, the lack~~stocker operations. As of ~~precipitation threatened to force the liquidation of breeding stock on many ranches throughout the south and southwestern United States. Year-to-date domestic~~September 1, 2019, cattle on feed ~~increased 5.93%~~numbers decreased 1.3% to ~~11.125~~10.98 million head ~~through October 1, 2018,~~ compared to the same period last year.

Packer demand was driven by strong domestic and international beef demand. Total steer and heifer slaughter through the end of August of 2018 increased 2.1% compared with the first eight months 2017. Slaughter capacity constraints, primarily due to labor shortages, have limited the packers’ ability to increase slaughter rates at the same pace as cattle on feed inventories, resulting in higher packer margins. However, these higher margins should incentivize the packers to increase slaughter capacity, which will be crucial for cattle feeding margins moving forward.

The U.S. looks poised to grow its global market share for animal protein while Australia continues to struggle with drought conditions, and ~~food safety scandals plague South America.~~African Swine Fever (“ASF”) issues in China should result in larger world export demand for animal protein from the U.S.

Year-to-date U.S. distillers grains exports through August 31, ~~2018,~~2019, were ~~7.9~~7.3 million metric tons, or 8.6% ~~higher~~lower than the same period last year, according to the USDA Foreign Agriculture Service. ~~Shipments of distillers grains to Southeast Asia increased 90% year over year due to growing demand for protein, which helped keep export volumes in line with last year.~~ Mexico, South Korea, Vietnam, ~~Thailand,~~ Indonesia, Canada, and Turkey, accounted for approximately ~~58%~~62% of total U.S. distillers export volumes.

While ASF may have a positive impact on animal protein demand from the U.S., it may have a negative impact on distillers grains exports and domestic usage. ASF may depress soybean meal demand in China which could make the animal feed more price competitive to distillers grains and allow for substitution of high-protein soybean meal worldwide.

Legislation and Regulation

We are sensitive to 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 fuels we handle. ~~Congress may also consider legislation that would impact the RFS. Bills~~Various bills have been ~~introduced~~discussed in the House

and Senate which would ~~either sunset~~eliminate the RFS entirely, ~~or sunset~~eliminate the corn based ethanol portion of the ~~mandate.~~mandate, or make it more difficult to sell fuel blends with higher levels of ethanol. However, we believe it is unlikely that any of these bills would become law in a divided Congress. In addition, the manner in which the EPA administers the RFS can have a significant impact on the actual amount of ethanol blended into the domestic fuel supply.

Federal mandates supporting the use of renewable fuels are a significant driver of ethanol demand in the U.S. Ethanol policies are influenced by ~~environmental~~ concerns for the environment, diversifying our fuel supply, and ~~an interest in~~ reducing the country’s dependence on foreign oil. Consumer acceptance of flex-fuel vehicles and higher ethanol blends of ethanol in non-flex-fuel vehicles may be necessary before ethanol can achieve ~~significant~~further growth in U.S. market share. ~~CAFE, which was~~Congress first enacted ~~by Congress~~Corporate Average Fuel Economy (CAFE) in 1975 to reduce energy consumption by increasing the fuel economy of cars and light ~~trucks,~~trucks. It provides a 54% efficiency bonus to flexible-fuel vehicles, ~~running~~which can operate on ethanol blends up to E85.

Another important factor is a waiver in the Clean Air Act, known as the One-Pound Waiver, which allows E10 to be sold year-round, even though it exceeds the Reid ~~vapor pressure~~Vapor Pressure limitation of nine pounds per square inch. ~~However,~~At the end of May 2019, the EPA finalized a rule which extended the One-Pound Waiver ~~does not apply~~ to E15 ~~or higher blends, even though~~expanding it ~~has similar physical properties to E10, so its sale is limited to~~beyond flex-fuel vehicles ~~only~~ during the June 1 to September 15 summer driving season.

~~On October 8, 2018, President Trump directed~~ This rule is being challenged in an action filed in Federal District Court for the ~~EPA to begin rulemaking to expand~~DC Circuit. However, the One-Pound Waiver is in effect, and for the first time ever E15 was legally sold to ~~E15 so it can be sold~~all vehicles model year ~~round. The EPA will follow~~2001 and newer during the ~~Administrative Procedure Act in proposing a rule, accepting public comment, and then issuing a final rule. The President has stated a goal of having a final rule out before the start of~~2019 summer driving ~~season on June 1, 2019. Any final rule from~~season.

When the ~~agency is susceptible to legal challenges.~~

~~When~~ RFS II was passed in 2007 and rulemaking finalized in October 2010, the required volume of conventional renewable fuel to be blended with gasoline was to increase each year until it reached 15.0 billion gallons in 2015. In November ~~2017,~~2018, the EPA announced it would maintain the 15.0 billion gallon mandate for conventional ethanol in ~~2018. In June 2018,~~2019. On July 5, 2019, the EPA ~~proposed to maintain~~released their annual proposal for RFS volumes, which included 15.0 billion gallons for conventional renewable fuel in 2020. On October 15, 2019, the EPA issued a supplemental proposal for RFS volumes, seeking additional comment on projecting the volume of fuels to be exempted by small refinery exemptions and ~~plans~~including those volumes in the annual calculation. These proposals are expected to ~~finalize~~be finalized by the ~~rule by November 30, 2018.~~end of the year.

The EPA has the authority to waive the mandates in whole or in part if there is inadequate domestic renewable fuel supply or the requirement severely harms the economy or environment. According to the RFS II, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. While conventional ethanol maintained 15 billion gallons, ~~2018 is~~2019 was the ~~first~~second year that the total proposed RVOs ~~are~~were more than 20% below statutory volumes levels. Thus, the EPA Administrator has directed his staff to initiate ~~the required technical analysis to perform any future~~a reset ~~consistent with the reset rules. The reset will be triggered if the final 2019 RVOs continue to be more than 20% below the statutory levels, as is expected, and~~rulemaking, wherein the EPA will ~~be required to~~ modify statutory volumes through 2022, ~~within one year of the trigger event,~~ based on the same factors used to set the RVOs post-2022.These factors include environmental impact, domestic energy security, expected production, infrastructure impact, consumer costs, job creation, price of agricultural commodities, food prices, and rural economic development.

The EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use based on their percentage of total domestic transportation fuel sales. Obligated parties use RINs to show compliance with RFS-mandated volumes. Ethanol producers assign RINs ~~are attached~~ to renewable fuels ~~by producers~~ and the RINs are detached when the renewable fuel is blended with transportation fuel ~~or traded~~domestically. Market participants can trade the detached RINs in the open market. The market price of detached RINs affects the price of ethanol in certain markets and influences the purchasing decisions by obligated parties.

The EPA can, in consultation with the Department of Energy, waive the obligation for individual refineries that are suffering “disproportionate economic hardship” due to compliance with the RFS. To qualify, the refineries must behave total throughput of under 75,000 barrels per day and state their case for an exemption in an application to the EPA for each compliance year.

The ~~previous administration issued these sparingly, granting 7 of 15 petitions in 2015, in whole or in part, for a total of 292.5 million gallons.~~

~~The current administration has been granting these at a much higher rate, waiving~~EPA waived the obligation for 19 of 20 applicants for compliance year 2016, totaling 790 million gallons ~~and 29~~ of 33renewable fuels. They also waived the obligation for 35 of 37 applicants for compliance year 2017, totaling ~~1.46~~1.82 billion ~~gallons. This~~gallons of renewable fuels. They waived the obligation for 31 of 42 applicants for compliance year 2018, totaling 1.43 billion gallons of renewable fuels. These waivers effectively ~~reduces~~reduced the annual RVO by that amount, since the ~~waived~~EPA has not accounted for the lost gallons ~~are not reallocated~~by allocating them to other obligated ~~parties at this time.~~ parties.

The resulting surplus of RINs in the market ~~has~~ brought values down significantly ~~from the mid $0.80 range early in the year~~ to ~~around $0.10.~~under $0.20. Since ~~the~~higher RIN ~~value helps~~values help to make higher blends of ethanol more cost ~~effective,~~competitive at the pump, lower RIN values could ~~negatively impact~~hinder or at least slow retailer and consumer adoption of E15 and other higher ~~blends.~~blends of ethanol. It is reasonable to assume there will be 30-40 waiver applications submitted for compliance year 2019, which, if handled as in years past, could represent approximately 1.5 to 2 billion gallons of renewable fuels.

~~On July 28, 2017,~~

Biofuels groups and biofuels opposition groups each have filed lawsuits related to RFS II. In addition to the E15 litigation discussed previously, biofuels groups have filed in the U.S. Federal District Court for the D.C. Circuit, challenging the 2019 RVO rule over the EPA’s failure to address small refinery exemptions in the rulemaking. Biofuel opposition groups have filed also in the DC Circuit, with such action consolidated with similar cases, to review the EPA’s 2018 RVO rulemaking. Biofuel groups have filed an action in the DC Circuit to compel the EPA to produce information under the Freedom of Information Act related to small refinery exemptions. Certain biofuel groups have further filed suit in the Tenth Circuit Court of Appeals challenging small refinery exemptions. Numerous other suits on related RFS II matters are also pending, namely involving RVOs and small refinery exemptions.

On October 4, 2019 the White House announced that they would start accounting for gallons lost to refinery exemptions in annual RVO rulemakings, beginning with a supplemental rule to the 2020 RVO which is due to be finalized before the end of 2019. They propose to add into the formula for the RVO a rolling average of the past three years’ waived gallons, so when additional waivers are granted, the total volume of renewable fuels required remains largely intact. This directive will also eliminate barriers to adoption of E15 and higher blends, including labeling changes and allowing E15 to be sold through E10 infrastructure.

In 2017, the D.C. Circuit ruled in favor of ~~the Americans for Clean Energy and its petitioners~~biofuel groups against the EPA related to its decision to lower the 2016 volume requirements. The Court concluded the EPA erred in how it interpreted the “inadequate domestic supply” waiver provision of RFS II, which authorizes the EPA to consider supply-side factors affecting the volume of renewable fuel available to refiners, blenders and importers to meet statutory volume requirements. The waiver provision does not allow the EPA to consider the volume of renewable fuel available to consumers or the demand-side constraints that affect the consumption of renewable fuelrequirements by ~~consumers.~~500 million gallons. As a result, the Court ~~vacated the EPA’s decision~~remanded to ~~reduce the total renewable fuel volume requirements for 2016 through its waiver authority, which~~ the EPA ~~is expected~~ to address. We believe this decision to confine the EPA’s waiver analysis to supply considerations benefits the industry overall and expect the primary impact will be on the RINs market. The EPA has not yet accountedmake up for the 500 million gallons. Despite this, in the proposed 2020 RVO rulemaking released in July 2019, the EPA stated it does not intend to make up the 500 million gallons ~~that~~as the court ~~in the Americans for Clean Energy case directed.~~directed, citing potential burden on obligated parties. It is anticipated that additional litigation will ensue from this matter.

Valero Energy and refining trade group American Fuel and Petrochemical Manufacturers (AFPM) have challenged the EPA’s handling of the U.S. biofuel mandate in separate actions on January 26, 2018. AFPM is asking the D.C. U.S. Court of Appeals to review the EPA’s November 2017 decision to reject proposed changes to the structure of the RFS, including moving the point of obligation from refiners and importers of fuel to fuel blenders. Valero filed two petitions with the same court, one seeking review of the annual RVO rule set by the EPA for 2018 and 2019, which dictates the volumes of renewable fuels to be blended in the coming years, and a second arguing against the EPA’s December 2017 assertion that the agency has fulfilled its duty to periodically review the RFS as directed by statute.

Government actions abroad can significantly impact the demand for U.S. ethanol. In September 2017, China’s National Development and Reform Commission, the National Energy Board and 15 other state departments issued a joint plan to expand the use and production of biofuels containing up to 10% ethanol by 2020. China, the number three importer of U.S. ethanol in 2016, imported negligible volumes during ~~the~~fiscal year 2018 due to a 30% tariff ~~imposed~~ on U.S. ~~and Brazil fuel~~ ethanol, which ~~took effect~~increased to 70% in ~~January 2017.~~early 2018. There is no assurance ~~the recently issued~~that China’s joint plan will lead to increased imports of U.S. ethanol ~~and recent trade tensions have caused China to raise their tariff on ethanol to 45% and then to 70%.~~in the near term. Our exports also face ~~tariff~~tariffs, rate quotas, countervailing duties, and other hurdles in Brazil, the European Union, India, Peru, and elsewhere, which limits our ability to compete in some markets.

In Brazil, the Secretary of Foreign Trade issued an official written resolution, imposing a 20% tariff on U.S. ethanol imports in excess of 150 million liters, or 39.6 million gallons per quarter in September 2017. The initial ruling iswas valid for two ~~years.~~ years; however, it was extended at the end of August 2019 for an additional year. On an annual basis, Brazil will now allow into the country 750 million duty free liters distributed on a quarterly basis as follows: September to November 100 million liters, December to February 100 million liters, March to May 275 million liters and June to August 275 million liters.

In June 2017, the Energy Regulatory Commission of Mexico (CRE) approved the use of 10% ethanol blends, which was challenged by ~~nine lawsuits. Four~~ten lawsuits, of which five cases were dismissed. The five remaining cases follow one of two tracks: 1) to determine the constitutionality of the CRE regulation, or 2) to determine the benefits, or lack thereof, of introducing E10 to Mexico. ~~Five of these cases were initially denied and are going through the appeals process.~~ An injunction was granted in October 2017, preventing the blending and selling of E10, but was overturned by a higher court in June 2018 making it legal to blend and sell E10 by PEMEX throughout Mexico except for its three largest metropolitan areas. U.S. ethanol exports to Mexico totaled 3029.4 mmg in ~~2017.~~2018.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and is effective January 1, 2018. We continue to analyze the Act’s impact to current and future taxes. We are also following the guidance of SAB 118 which provides a measurement period to complete accounting for certain elements of the tax reform. On March 23, 2018, Congress rescinded an unintended consequence of the Act under section 199A, which provided certain tax benefits to producers selling grain to cooperative associations and enabled a potential marketplace advantage over other agribusiness companies.

Comparability of our Financial Results

We report the financial and operating performance for the following four operating segments: (1) ethanol production, which includes the production of ethanol, ~~and~~ distillers grains and ~~recovery of~~ corn oil, (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, corn oil, natural gas and other commodities, (3) food and ingredients, which includes ~~cattle feeding, vinegar production and~~ food-grade corn oil ~~operations~~ and vinegar production until the sale of Fleischmann’s Vinegar during the fourth quarter of 2018 and (4) partnership, which includes fuel storage and transportation services.

The three and nine months ended September 30, 2019 do not include operations of the Bluffton, Lakota, Hopewell and Riga ethanol plants which were either permanently closed or sold during the fourth quarter of 2018. Additionally, the three and nine months ended September 30, 2019 do not include Fleischmann’s Vinegar operations, which was also sold in the fourth quarter of 2018.

Additionally, we sold an aggregate 50% membership interest in GPCC to TGAM and StepStone during the third quarter of 2019. After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. The company concluded that the disposition of GPCC met the requirements under ASC 205-20. Therefore,GPCC results for the three and nine months ended September 30, 2019 and 2018 are classified as discontinued operations. Furthermore, in accordance with ASC 205-20, the related assets and liabilities of GPCC have been presented as discontinued operations in the December 31, 2018 consolidated balance sheet.

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 and corn oil of our ethanol production segment. Our partnership segment provides fuel storage and transportation services for our agribusiness and energy services segment. These intersegment activities are treated like third-party transactions with origination, marketing and storage fees charged at estimated market values. Consequently, these transactions affect segment performance; however, they do not impact our consolidated results since the revenues and corresponding costs are eliminated.

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. When we evaluate segment performance, we review the following segment information as well as earnings before interest, income taxes, depreciation and amortization, excluding amortization of operating lease right-of-use assets and amortization of debt issuance costs, or EBITDA.

The company also owns a 90.0% interest in BioProcess Algae, a joint venture formed in 2008. Beginning April 1, 2016, we consolidate the financial results of BioProcess Algae, and record a noncontrolling interest for the economic interest in the joint venture held by others.

As of September 30, ~~2018,~~2019, we, together with our subsidiaries, own a ~~62.4%~~49.1% limited partner interest and a 2.0% general partner interest in the partnership and own all of the partnership’s incentive distribution rights, with the remaining ~~35.6%~~48.9% limited partner interest owned by public common unitholders. We consolidate the financial results of the partnership, and record a noncontrolling interest for the economic interest in the partnership held by the public common unitholders.

Segment Results

The selected operating segment financial information are as follows (in thousands):


	Three Months Ended September 30,				%	Nine Months Ended September 30,				%	Three Months Ended ‎September 30,				%	Nine Months Ended ‎September 30,				%
	2018		2017		Variance	2018		2017		Variance	2019⁽¹⁾		2018⁽¹⁾		Variance	2019⁽¹⁾		2018⁽¹⁾		Variance
Revenues:
Ethanol production:
Revenues from external customers	$	573,399	$	620,180	(7.5%)	$	1,726,418	$	1,857,356	(7.0%)	$	484,382	$	576,475	(16.0%)	$	1,206,107	$	1,735,546	(30.5%)
Intersegment revenues		3,113		3,579	(13.0)		9,285		6,624	40.2		24		37	(35.1)		75		157	(52.2)
Total segment revenues		576,512		623,759	(7.6)		1,735,703		1,863,980	(6.9)		484,406		576,512	(16.0)		1,206,182		1,735,703	(30.5)
Agribusiness and energy services:
Revenues from external customers		174,290		164,604	5.9		546,151		483,670	12.9		146,650		177,832	(17.5)		488,687		558,054	(12.4)
Intersegment revenues		12,692		14,406	(11.9)		38,249		33,679	13.6		7,293		9,150	(20.3)		19,432		26,346	(26.2)
Total segment revenues		186,982		179,010	4.5		584,400		517,349	13.0		153,943		186,982	(17.7)		508,119		584,400	(13.1)
Food and ingredients:
Revenues from external customers		251,113		114,750	118.8		755,109		329,432	129.2		-		33,443	(100.0)		1,451		102,277	(98.6)
Intersegment revenues		38		38	-		118		113	4.4		-		-	-		-		-	-
Total segment revenues		251,151		114,788	118.8		755,227		329,545	129.2		-		33,443	(100.0)		1,451		102,277	(98.6)
Partnership:
Revenues from external customers		1,298		1,701	(23.7)		4,546		4,724	(3.8)		1,318		1,298	1.5		5,315		4,546	16.9
Intersegment revenues		24,472		24,748	(1.1)		72,949		74,019	(1.4)		18,836		24,472	(23.0)		56,751		72,949	(22.2)
Total segment revenues		25,770		26,449	(2.6)		77,495		78,743	(1.6)		20,154		25,770	(21.8)		62,066		77,495	(19.9)
Revenues including intersegment activity		1,040,415		944,006	10.2		3,152,825		2,789,617	13.0		658,503		822,707	(20.0)		1,777,818		2,499,875	(28.9)
Intersegment eliminations		(40,315)		(42,771)	(5.7)		(120,601)		(114,435)	5.4		(26,153)		(33,659)	(22.3)		(76,258)		(99,452)	(23.3)
Revenues as reported	$	1,000,100	$	901,235	11.0%	$	3,032,224	$	2,675,182	13.3%	$	632,350	$	789,048	(19.9%)	$	1,701,560	$	2,400,423	(29.1%)

	Three Months Ended ‎September 30,				%	Nine Months Ended ‎September 30,				%
	2019⁽¹⁾		2018⁽¹⁾		Variance	2019⁽¹⁾		2018⁽¹⁾		Variance
Cost of goods sold:
Ethanol production	$	512,527	$	560,719	(8.6%)	$	1,289,366	$	1,706,891	(24.5%)
Agribusiness and energy services		150,465		179,432	(16.1)		486,305		546,318	(11.0)
Food and ingredients		3		26,228	(100.0)		1,526		79,894	(98.1)
Partnership		-		-	*		-		-	*
Intersegment eliminations		(30,866)		(33,299)	(7.3)		(76,716)		(99,189)	(22.7)
	$	632,129	$	733,080	(13.8%)	$	1,700,481	$	2,233,914	(23.9%)

(1)Cost of goods sold include certain items which were previously considered intercompany transactions prior to the disposition of GPCC and therefore eliminated upon consolidation. These cost of goods sold transactions are now presented gross in cost of goods sold. These cost of goods sold transactions total $5.5 million and $14.4 million for the three and nine months ended September 30, 2019, respectively, and $6.6 million and $21.0 million for the three and nine months ended September 30, 2018, respectively.


	Three Months Ended ‎September 30,				%	Nine Months Ended ‎September 30,				%
	2019		2018		Variance	2019		2018		Variance
Operating income (loss):
Ethanol production	$	(49,289)	$	(15,961)	(208.8%)	$	(147,366)	$	(60,704)	(142.8%)
Agribusiness and energy services		(461)		2,850	(116.2)		9,184		22,080	(58.4)
Food and ingredients		(6)		3,892	(100.2)		(76)		12,426	(100.6)
Partnership		12,322		16,725	(26.3)		38,029		48,214	(21.1)
Intersegment eliminations		4,738		(325)	*		533		(113)	*
Corporate activities		(9,669)		(10,965)	11.8		(27,952)		(34,879)	19.9
	$	(42,365)	$	(3,784)	*	$	(127,648)	$	(12,976)	*


	Three Months Ended September 30,				%	Nine Months Ended September 30,				%	Three Months Ended ‎September 30,				%	Nine Months Ended ‎September 30,				%
	2018		2017		Variance	2018		2017		Variance	2019		2018		Variance	2019		2018		Variance
Cost of goods sold:
Depreciation and amortization:
Ethanol production	$	560,719	$	590,904	(5.1%)	$	1,706,891	$	1,802,688	(5.3%)		15,547		24,289	(36.0%)		46,324		65,284	(29.0%)
Agribusiness and energy services		179,432		168,735	6.3		546,318		487,239	12.1		541		675	(19.9)		1,642		1,923	(14.6)
Food and ingredients		236,150		98,854	138.9		702,355		281,898	149.2		-		2,333	*		-		6,788	*
Partnership		-		-	*		-		-	*		991		1,120	(11.5)		2,747		3,406	(19.3)
Intersegment eliminations		(39,917)		(42,706)	(6.5)		(120,220)		(114,123)	5.3
Corporate activities												749		849	(11.8)		2,250		2,769	(18.7)
	$	936,384	$	815,787	14.8%	$	2,835,344	$	2,457,702	15.4%	$	17,828	$	29,266	(39.1%)	$	52,963	$	80,170	(33.9%)

The following table reconciles net ~~income (loss)~~loss from continuing operations including noncontrolling interest to adjusted EBITDA ~~for the periods indicated~~ (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended ‎September 30,				Nine Months Ended ‎September 30,
	2018		2017		2018		2017		2019		2018		2019		2018
Net income (loss)	$	(7,419)	$	39,429	$	(23,123)	$	29,284
Net loss from continuing operations including noncontrolling interest									$	(38,884)	$	(7,886)	$	(114,507)	$	(34,958)
Interest expense		23,399		31,889		67,548		69,815		10,548		19,703		31,528		58,330
Income tax benefit		(14,658)		(48,775)		(31,438)		(60,905)		(12,530)		(14,973)		(40,692)		(34,524)
Depreciation and amortization(1)		30,713		27,834		84,010		80,105		17,828		29,266		52,963		80,170
EBITDA	$	32,035	$	50,377	$	96,997	$	118,299		(23,038)		26,110		(70,708)		69,018
EBITDA adjustments related to discontinued operations										8,469		5,925		17,703		27,979
Proportional share of EBITDA adjustments to equity method investees										1,186		311		1,827		745
Adjusted EBITDA									$	(13,383)	$	32,346	$	(51,178)	$	97,742

The following discussion provides greater detail about our third quarter segment performance.

Ethanol Production Segment

Key operating data for our ethanol production segment is as follows:


	Three Months Ended ‎September 30,
	2019	2018	% Variance

Ethanol sold
(thousands of gallons)	238,473	304,826	(21.8)
Distillers grains sold
(thousands of equivalent dried tons)	617	811	(23.9)
Corn oil sold
(thousands of pounds)	60,607	78,304	(22.6)
Corn consumed
(thousands of bushels)	82,730	105,965	(21.9)

Revenues in our ethanol production segment decreased $92.1 million for the three months ended September 30, 2019 compared with the same period in 2018 primarily due to the disposition of three ethanol plants during the fourth quarter of 2018 as well as lower average realized prices for ethanol and distillers grains.

Operating income decreased $33.3 million and EBITDA decreased $42.3 million for the three months ended September 30, 2019 compared with the same period in 2018primarily as a result of decreased margins. Depreciation and amortization expense decreased $8.7 million for the three months ended September 30, 2019 compared with the same period last year, primarily due to the ~~compression~~disposition of three ethanol ~~production margins. Interest expense~~plants during the fourth quarter of 2018.

Agribusiness and Energy Services Segment

Revenues in our agribusiness and energy services segment decreased ~~$8.5~~$33.0 million while operating income decreased by $3.3 million and EBITDA decreased by $3.6 million for the three months ended September 30, ~~2018,~~2019 compared with the same period in 2017, primarily due to higher expense associated with the termination of previous credit facilities during the three months ended September 30, 2017. Income tax benefit was $14.7 million for the three months ended September 30, 2018, compared with $48.8 million for the same period in 2017 due to additional tax benefits related to R&D Credits recognized for all open tax years during the three months ended September 30, 2017.

2018. The ~~following discussion provides greater detail about our~~ ~~third~~ ~~quarter segment performance.~~

~~Ethanol Production Segment~~

~~Key operating data for our ethanol production segment is as follows:~~

Three Months Ended
September 30,

2018

2017

% Variance

Ethanol produced

(thousands of gallons)

304,826

313,642

(2.8)
Distillers grains produced

(thousands of equivalent dried tons)

811

817

(0.7)
Corn oil produced

(thousands of pounds)

78,304

75,440

3.8
Corn consumed

(thousands of bushels)

105,965

109,544

(3.3)

Revenues in our ethanol production segment decreased $47.2 million for the three months ended September 30, 2018, compared with the same period in 2017 primarily due to lower volumes of ethanol and distillers grains produced in addition to lower average ethanol prices realized, partially offset by higher average distillers grains prices realized.

Cost of goods sold for our ethanol production segment decreased $30.2 million for the three months ended September 30, 2018, compared with the same period last year due to decreased volumes sold offset by higher corn prices. As a result of the factors identified above, operating income decreased $19.1 million and EBITDA decreased $17.1 million for the three months ended September 30, 2018, compared with the same period in 2017. Depreciation and amortization expense for the segment was $24.3 million for the three months ended September 30, 2018, compared with $21.0 million for the same period last year primarily due to accelerated depreciation associated with fixed asset disposals during the three months ended September 30, 2018.

~~Agribusiness and Energy Services Segment~~

Revenues in our agribusiness and energy services segment increased $8.0 million while operating income decreased $0.8 million and EBITDA decreased by $1.6 million for the three months ended September 30, 2018, compared with the same period in 2017. The increasedecrease in revenues was primarily due to ~~higher~~a decrease in ethanol, distillers grain and corn oil production and trading activity, as well as lower average realized prices for ~~distillers grains, partially offset by a decrease in ethanol production and trading activity.~~ethanol. Operating income and EBITDA decreased primarily as a result of decreased ~~trading activity~~ margins.

Food and Ingredients Segment

Revenues in our food and ingredients segment ~~increased $136.4~~decreased $33.4 million for the three months ended September 30, ~~2018,~~2019 compared with the same period in ~~2017.~~2018 primarily due to the sale of Fleischmann’s Vinegar during the fourth quarter of 2018.

As a result of factors identified above, operating income decreased by $3.9 million and EBITDA decreased $6.2 million for the three months ended September 30, 2019 compared with the same period in 2018.

Partnership Segment

Revenues generated by our partnership segment decreased $5.6 million for the three months ended September 30, 2019 compared to the same period of 2018, primarily due to lower storage and throughput volumes due to disposition of three ethanol plants during the fourth quarter of 2018 as well as lower revenues generated from rail transportation services due to the assignment of various railcar operating leases as part of the disposition. Operating income decreased $4.4 million and EBITDA decreased $4.3 million for the three months ended September 30, 2019 compared with the same period in 2018 primarily due to the factors described above.

Intersegment Eliminations

Intersegment eliminations of revenues decreased by $7.5 million for the three months ended September 30, 2019 compared with the same period in 2018 due to a decrease in storage and throughput fees paid to the partnership segment due to the disposition of the three ethanol plants during the further quarter of 2018 as well as decreased intersegment marketing fees within the agribusiness and energy services segment.

Corporate Activities

Operating income was impacted by a decrease in operating expenses of $1.3 million for the three months ended September 30, 2019 compared with the same period in 2018 primarily as a result of a workforce reduction which occurred as part of our portfolio optimization program in the last half of 2018.

Income Taxes

We recorded income tax benefit of $12.5 million for the three months ended September 30, 2019, compared with $15.0 million for the same period in 2018. The ~~increase~~change in ~~revenues~~income tax benefit was primarily due to ~~an increase in cattle volumes sold~~ ~~as a~~

~~result~~the impact of ~~the acquisitions of cattle feeding operations during 2017 and 2018. Cattle head sold~~R&D credits for the three months ended September 30, 2018, offset by a higher loss before income taxes for the three months ended September 30, 2019.

Net Income from Discontinued Operations

As previously discussed, we sold an aggregate 50% membership interest in GPCC to TGAM and ~~2017 was approximately 147,000~~StepStone during the third quarter of 2019. After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and ~~48,000, respectively.~~

~~Operating~~the GPCC investment is accounted for using the equity method of accounting. The company concluded that the disposition of GPCC met the requirements under ASC 205-20. Therefore,GPCC results for the three and nine months ended September 30, 2019 and 2018 are classified as discontinued operations. Net income ~~decreased~~from discontinued operations increased by ~~$1.8 million and EBITDA decreased $1.1~~$2.9 million for the three months ended September 30, 2019 primarily due to increased cattle margins.

Nine Months Ended September 30, 2019 Compared with the Nine Months Ended September 30, 2018

Consolidated Results

Consolidated revenues decreased $698.9 million for the nine months ended September 30, 2019 compared with the same period in ~~2017~~2018 primarily due to the disposition of three ethanol plants and the sale of Fleischmann’s Vinegar during the fourth quarter of 2018.

Operating income decreased $114.7 million and adjusted EBITDA decreased $148.9 million for the nine months ended September 30, 2019 compared with the same period last year primarily due to lower volume and decreased margins on ethanol production as well as the disposition of Fleischmann’s Vinegar during the fourth quarter of 2018. Interest expense decreased $26.8 million for the nine months ended September 30, 2019 compared with the same period in 2018, primarily due to the repayment of the $500 million senior secured term loan during the fourth quarter of 2018. Income tax benefit was $40.7 million for the nine months ended September 30, 2019 compared with $34.5 million for the same period in 2018.

The following discussion provides greater detail about our year-to-date segment performance.

Ethanol Production Segment

Key operating data for our ethanol production segment is as follows:


	Nine Months Ended ‎September 30,
	2019	2018	% Variance

Ethanol produced
(thousands of gallons)	617,536	881,518	(29.9)
Distillers grains produced
(thousands of equivalent dried tons)	1,601	2,279	(29.7)
Corn oil produced
(thousands of pounds)	148,630	222,994	(33.3)
Corn consumed
(thousands of bushels)	214,734	306,395	(29.9)

Revenues in our ethanol production segment decreased $529.5 million for the nine months ended September 30, 2019 compared with the same period in 2018 primarily due to the disposition of three ethanol plants during the fourth quarter of 2018 as well as lower production volumes of ethanol, distillers grains and corn oil due to the depressed margin environment and lower average realized prices for ethanol and distillers grains.

Operating income decreased $86.7 million and EBITDA decreased $105.8 million for the nine months ended September 30, 2019 compared with the same period in 2018 primarily as a result of decreased margins. Depreciation and amortization expense decreased $19.0 million for the nine months ended September 30, 2019 compared with the same period last year, primarily due to the disposition of three ethanol plants during the fourth quarter of 2018.

Agribusiness and Energy Services Segment

Revenues in our agribusiness and energy services segment decreased $76.3 million while operating income decreased by $12.9 million and EBITDA decreased by $13.3 million for the nine months ended September 30, 2019 compared with the same period in 2018. The decrease in revenues was primarily due to a decrease in ~~cattle~~ethanol, distillers grain and corn oil production and trading activity, as well as lower average realized prices for ethanol. Operating income and EBITDA decreased primarily as a result of decreased margins.

Food and Ingredients Segment

Revenues in our food and ingredients segment decreased $100.8 million for the nine months ended September 30, 2019 compared with the same period in 2018 due to the sale of Fleischmann’s Vinegar during the fourth quarter of 2018.

Operating income decreased by $12.5 million and EBITDA decreased $19.3 million for the nine months ended September 30, 2019 compared with the same period in 2018 due to the sale of Fleischmann’s Vinegar during the fourth quarter of 2018.

Partnership Segment

Revenues generated by our partnership segment decreased ~~$0.7~~$15.4 million for the ~~three~~nine months ended September 30, ~~2018,~~2019 compared to the same period of ~~2017,~~2018, primarily due to lower storage and throughput volumes due to the disposition of three ethanol plants during the fourth quarter of 2018 as well as lower production at our remaining plants and lower revenues generated from ~~our~~ rail transportation services ~~and terminal services, offset by an increase in revenues generated from trucking services and storage and throughput services.~~ due to the assignment of various railcar operating leases as part of the disposition. Operating income ~~increased $0.4~~decreased $10.2 million and EBITDA ~~increased $0.3~~decreased $10.3 million for the ~~three~~nine months ended September 30, ~~2018,~~2019 compared with the same period in ~~2017~~ 2018 primarily due to ~~lower railcar lease expense associated with our terminal operations.~~the factors described above.

Intersegment Eliminations

Intersegment eliminations of revenues decreased by ~~$2.5~~$23.2 million for the ~~three~~nine months ended September 30, ~~2018,~~2019 compared with the same period in ~~2017~~2018 due to a decrease in storage and throughput fees paid to the partnership segment as well as decreased intersegment ~~corn purchases~~marketing fees within the agribusiness and energy services ~~segment as well as decreased intersegment distillers grain revenues within the ethanol production segment, both primarily due to decreased sales to the food and ingredients segment for cattle feed.~~segment.

Corporate Activities

Operating income was impacted by a decrease in operating expenses for corporate activities of $1.5 million for the three months ended September 30, 2018, compared with the same period in 2017 primarily due to decreased selling, general and administrative expenses related to personnel costs in 2018.

~~Income Taxes~~

We recorded income tax benefit of $14.7 million for the three months ended September 30, 2018, compared with $48.8 million for the same period in 2017. The decrease in income tax benefit was due primarily to the company’s recognition of a net tax benefit of $10.1 million during the three months ended September 30, 2018, compared to ~~a net tax benefit of $49.5 million during the same period in 2017, for federal and state R&D Credits relating to current and prior periods.~~

~~Nine Months Ended September 30, 2018, Compared with the Nine Months Ended September 30, 2017~~

~~Consolidated Results~~

~~Consolidated revenues increased $357.0~~$6.9 million for the nine months ended September 30, ~~2018,~~2019 compared with the same period in ~~2017,~~2018 primarily as a result of ~~the acquisitions~~ a workforce reduction which occurred as part of ~~cattle feeding operations at the end of the first quarter and at the beginning of the second quarter of 2017 and~~our portfolio optimization program in the ~~third quarter~~last half of 2018. The increase was also driven by higher average realized prices for distillers grains and additional natural gas volumes sold, partially offset by a decrease in volumes for ethanol and distillers grains and lower average realized prices for ethanol and corn oil.

~~Operating~~Income Taxes

We recorded income ~~decreased $25.8 million and EBITDA decreased $21.3~~tax benefit of $40.7 million for the nine months ended September 30, ~~2018,~~2019, compared with $34.5 million for the same period ~~last year primarily~~in 2018. The change in income tax benefit was due to a higher loss before income taxes for the nine months ended September 30, 2019, as well as the impact of R&D credits for the same period in 2018.

Net Income from Discontinued Operations

As previously discussed, we sold an aggregate 50% membership interest in GPCC to TGAM and StepStone during the third quarter of 2019. After closing, GPCC is no longer consolidated in the company’s consolidated financial statements and the GPCC investment is accounted for using the equity method of accounting. The company concluded that the disposition of GPCC met the requirements under ASC 205-20. Therefore,GPCC results for the three and nine months ended September 30, 2019 and 2018 are classified as discontinued operations. Net income from discontinued operations decreased ~~margins in our ethanol production segment. Interest expense decreased $2.3~~by $10.9 million for the nine months ended September 30, ~~2018, compared with the same period in 2017,~~2019 primarily due to ~~higher expense associated with the termination of previous credit facilities during the nine months ended September 30, 2017, partially offset by higher average debt outstanding~~severe winter weather and higher borrowing costs during the nine months ended September 30, 2018. Income tax benefit was $31.4 million for the nine months ended September 30, 2018, compared with $60.9 million for the same period in 2017~~due to additional tax benefits related to R&D Credits recognized for all open tax years during the nine months ended September 30, 2017.~~

~~The following discussion provides greater detail about our~~ ~~year to date~~ ~~segment performance.~~

~~Ethanol Production Segment~~

~~Key operating data for our ethanol production segment is as follows:~~

Nine Months Ended
September 30,

2018

2017

% Variance

Ethanol produced

(thousands of gallons)

881,518

915,607

(3.7)
Distillers grains produced

(thousands of equivalent dried tons)

2,279

2,421

(5.9)
Corn oil produced

(thousands of pounds)

222,994

216,482

3.0
Corn consumed

(thousands of bushels)

306,395

318,709

(3.9)

Revenues in our ethanol production segment decreased $128.3 million for the nine months ended September 30, 2018, compared with the same period in 2017 primarily due to lower volumes of ethanol and distillers grains sold in addition to lower average ethanol and corn oil prices realized, partially offset by higher average distillers grains prices realized.

Cost of goods sold for our ethanol production segment decreased $95.8 million for the nine months ended September 30, 2018, compared with the same period last year due to lower production volumes and lower corn prices. As a result of the factors identified above, operating income decreased $34.8 million and EBITDA decreased $33.8 million for the nine months ended September 30, 2018, compared with the same period in 2017. Depreciation and amortization expense for the segment was $65.3 million for the nine months ended September 30, 2018, compared with $61.4 million for the same period last year primarily due to accelerated depreciation associated with fixed asset disposals during the nine months ended September 30, 2018.

~~Agribusiness and Energy Services Segment~~

Revenues in our agribusiness and energy services segment increased $67.1 million while operating income increased $8.9 million and EBITDA increased by $8.1 million for the nine months ended September 30, 2018, compared with the same period in 2017. The increase in revenues was primarily due to an increase in ethanol and natural gas trading activity, partially offset by lower average realized prices for corn oil. Operating income and EBITDA increased primarily as a result of increased trading activity margins.

~~Food and Ingredients Segment~~

Revenues in our food and ingredients segment increased $425.7 million for the nine months ended September 30, 2018, compared with the same period in 2017. The increase in revenues was primarily due to an increase in cattle volumes sold ~~as a result of~~ ~~the acquisitions of cattle feeding operations~~abnormally negative basis during the first ~~and second quarters of 2017~~ ~~and in the third~~ quarter of ~~2018. Cattle head sold for the nine months ended September 30, 2018, and 2017, was approximately 402,000 and 128,000, respectively.~~2019.

Operating income increased by $3.4 million and EBITDA increased $7.5 million for the nine months ended September 30, 2018, compared with the same period in 2017 primarily due to the increase in cattle volumes outlined above. During the nine months ended September 30, 2018, the company recognized a gain within other income of $4.5 million related to business interruption and property insurance proceeds received in excess of the book value of certain fixed assets that were damaged at the Hereford cattle feed yard.

~~Partnership Segment~~

Revenues generated by our partnership segment decreased $1.2 million for the nine months ended September 30, 2018, compared to the same period of 2017, due to lower revenues generated from our rail transportation and terminal services, offset by an increase in trucking service and storage and throughput services. Operating income increased $0.5 million for the nine months ended September 30, 2018, compared with the same period in 2017 ~~primarily due to a decrease in railcar lease~~

~~expense and unloading fees, partially offset by increased wages, fuel and other expenses. EBITDA increased $0.1 million for the nine months ended September 30, 2018, compared with the same period in 2017~~.

~~Intersegment Eliminations~~

Intersegment eliminations of revenues increased by $6.2 million for the nine months ended September 30, 2018, compared with the same period in 2017 due to increased intersegment corn purchases within the agribusiness and energy services segment as well as increased intersegment distillers grain revenues within the ethanol production segment, both primarily due to increased sales to the food and ingredients segment for cattle feed.

~~Corporate Activities~~

Operating income was impacted by an increase in operating expenses for corporate activities of $4.0 million for the nine months ended September 30, 2018, compared with the same period in 2017 primarily due to increased selling, general and administrative expenses related to personnel costs in 2018.

~~Income Taxes~~

We recorded income tax benefit of $31.4 million for the nine months ended September 30, 2018, compared with $60.9 million for the same period in 2017. The decrease in income tax benefit was due primarily to the company’s recognition of a net tax benefit of $18.4 million during the nine months ended September 30, 2018, compared to $49.5 million during the same period in 2017, for federal and state R&D Credits relating to current and prior periods.

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 bank credit facilities, or issuance of senior notes or equity. 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 and history of consistent cash flow from operating activities provide a solid foundation to meet our future liquidity and capital resource requirements.

On September 30, ~~2018,~~2019, we had ~~$171.7~~$235.5 million in cash and equivalents, excluding restricted cash, consisting of ~~$155.6~~$160.5 million held at our parent company and the remainder held at our subsidiaries. Additionally, we had ~~$62.8~~$18.5 million in restricted cash at September 30, ~~2018.~~2019. We also had ~~$491.6~~$328.4 million available under our committed revolving credit agreements, some of which were subject to restrictions or other lending conditions. Funds at certain subsidiaries are generally required for their ongoing operational needs and restricted from distribution. At September 30, ~~2018,~~2019, our subsidiaries had approximately ~~$171.2~~$63.5 million of net assets that were not available to us in the form of dividends, loans or advances due to restrictions contained in their credit facilities. ~~As a result of the~~ $500 million term loan agreement and related debt extinguishment at Green Plains Processing and Fleischmann’s Vinegar, we no longer consider certain subsidiaries to have restrictions on cash and asset distributions.

Net cash ~~provided by~~used in operating activities for continuing operations was ~~$84.4~~$17.8 million for the nine months ended September 30, ~~2018,~~2019 compared with ~~$114.2~~net cash provided by operating activities for continuing operations of $58.1 million ~~used~~ for the same period in ~~2017.~~2018. Operating activities compared to the prior year were primarily affected by ~~decreases~~changes in ~~cash spent on cattle inventory offset by~~working capital as well as decreases in operating income when compared to the same period of the prior year. Net cash ~~used in~~provided by investing activities for continuing operations was ~~$150.5~~$37.2 million for the nine months ended September 30, ~~2018,~~2019 compared ~~to $110.2~~with net cash used in investing activities for continuing operations of $24.8 million for the same period in ~~2017, with the increase~~2018, due primarily to the ~~acquisition~~receipt of ~~cattle feed operations during~~$77.2 million for the ~~current year, partially~~disposition of GPCC offset by ~~cash received from other investing activities.~~increased capital expenditures at our existing ethanol plants. Net cash used in financing activities for continuing operations was ~~$11.8~~$46.4 million for the nine months ended September 30, ~~2018,~~2019 compared with ~~net cash provided by financing activities of $164.3~~$117.0 million for the same period in ~~2017, with the~~2018, resulting from an increase in ~~cash used resulting from lower~~ net ~~short-term borrowings.~~borrowings offset by payments for the repurchase of common stock.

Additionally, Green Plains Trade ~~Green Plains Cattle~~ and Green Plains Grain 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 ~~$31.1~~$43.4 million induring the ~~first~~ nine months ended September 30, 2019, primarily related to our high-protein and Project 24 initiatives. We incurred capital expenditures for our discontinued operations of ~~2018 for various maintenance and expansion projects.~~$4.2 million. Capital spending for the remainder of ~~2018~~2019 is expected to be between approximately $4$20.0 million and $25.0 million for various

projects, which are expected to be financed with ~~cash provided by operating activities and~~ available borrowings under our credit ~~facilities.~~facilities and cash provided by operating activities.

Our business is highly sensitive to the price of commodities, particularly for corn, ethanol, distillers grains, corn oil and natural ~~gas and cattle.~~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.

~~We have paid a~~On June 18, 2019, the company announced that its board of directors has decided to suspend its future quarterly cash dividend ~~since August 2013,~~following the June 14, 2019 dividend payment, in order to retain and ~~anticipate declaring a~~redirect cash ~~dividend in future quarters on a regular basis. Future declarations~~flow to the company’s Project 24 operating expense equalization plan, the deployment of ~~dividends, however, are subject to board approval~~high-protein technology and may be adjusted as our liquidity, business needs or market conditions change. On August 15, 2018, our board of directors declared a quarterly cash dividend of $0.12 per share. The dividend was paid on September 14, 2018, to shareholders of record at the close of business on August 27, 2018.its stock repurchase program.

For each calendar quarter commencing with the quarter ended September 30, 2015, the partnership agreement requires the partnership to distribute all available cash, as defined, to its partners, including us, within 45 days after the end of each calendar quarter. Available cash generally means all cash and cash equivalents on hand at the end of that quarter less cash reserves established by our general partner plus all or any portion of the cash on hand resulting from working capital borrowings made subsequent to the end of that quarter. On October ~~18, 2018,~~17, 2019, the board of directors of the general partner of the partnership declared a cash distribution of $0.475 per unit on outstanding common and subordinated units. The distribution is payable on November ~~9, 2018,~~8, 2019, to unitholders of record at the close of business on November ~~2, 2018.~~1, 2019.

In August 2014, we announced a share repurchase program of up to $100 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~~During the three months ended September 30, 2019, we purchased a total of 1,662,607 shares ~~during the third quarter~~ of ~~2018 due to certain restrictions under the term loan agreement.~~our common stock for approximately $16.0 million. To date, we have repurchased ~~909,667 shares~~5,979,233 of common stock for approximately ~~$16.7~~$75.6 million under the program. On October 30, 2019, the company’s board of directors authorized an additional $100 million share repurchase taking the previously authorized amount from $100 million to $200 million.

We believe we have sufficient working capital for our existing operations. Furthermore, our liquidity position has improved ~~subsequent to September 30, 2018,~~ as a result of the ~~recently announced~~partial sale of GPCC during the third quarter of 2019, as well as the sale of three of our ethanol plants ~~located in Bluffton, Indiana, Lakota, Iowa,~~ and ~~Riga, Michigan as well as the sale of~~ Fleischmann’s Vinegar ~~Company. We anticipate that~~during the fourth quarter of 2018. The majority of net cash proceeds from the sales of three of our ethanol plants and Fleischmann’s Vinegar, net of fees and taxes, ~~will be approximately $645 million, which we expect will be~~were used to pay off the outstanding term loan balance. ~~For additional information related~~Net cash proceeds from the partial sale of GPCC, net of fees and taxes, were used to repurchase the ~~subsequent sales, see~~ ~~Note 16 – Subsequent Events~~ ~~included~~company’s common stock as part of ~~the notes to consolidated financial statements.~~ our share repurchase program, continued investment into our high-protein initiative and general corporate purposes. A continued sustained period of unprofitable operations, however, may strain our liquidity making it difficult to maintain compliance with our financing arrangements. We may sell additional assets or equity or borrow capital to improve or preserve our liquidity, expand our business ~~or build additional~~ or acquire existing businesses. We cannot provide assurance that we will be able to secure funding necessary for additional working capital or these projects at reasonable terms, if at all.

Debt

For additional information related to our debt, see Note 9 – Debt ~~and~~ ~~Note 16 – Subsequent Events~~ included as part of the notes to consolidated financial statements and Note 1112 – Debt included as part of the notes to consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

We were in compliance with our debt covenants at September 30, ~~2018.~~2019. Based on our forecasts, we believe we will maintain compliance at each of our subsidiaries for the next twelve months or 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.

As outlined in Note 9 - Debt, we use LIBOR as a reference rate for certain revolving credit facilities. LIBOR is currently set to be phased out at the end of 2021. At this time, it is not possible to predict the effect of this change or the alternative reference rate to be used. We will need to renegotiate certain credit facilities to determine the interest rate to replace LIBOR with the new standard that is established. As such, the potential effect of any such event on interest expense cannot yet be determined.

Corporate Activities

On ~~August 29, 2017,~~June 21, 2019, we issued $105.0 million of 4.00% convertible senior notes due in 2024, or the ~~company and substantially all~~4.00% notes. We used approximately $57.8 million of the ~~company’s subsidiaries, but not including Green Plains Partners and certain other entities as guarantors, entered into a $500.0~~net proceeds to repurchase the $56.8 million term loan agreement with BNP Paribas, as administrative agent and collateral agent and certain other financial institutions, which matures on August 29, 2023, and may be prepaid at any time without premium or penalty other than customary breakage costs with respect to Eurodollar-based loans or certain other limited circumstances in which event a 1.0% prepayment premium would be due.

~~The term loan agreement requires~~outstanding principal ~~payments~~amount of $1.25 million on the last day of each quarter, beginning on December 31, 2017, with a final installment payable on August 29, 2023, equal to the unpaid principal and interest balances of the term loan agreement. Beginning in 2018, the credit facility also has a provision requiring the company to make special annual payments of 50% or 75% of its ~~available free cash flow, subject to certain limitations. The term loan bears interest at a floating rate of a base rate plus a margin of 4.50% or LIBOR plus a margin of 5.50%.~~

The term loan agreement is guaranteed by the company and the term loan obligors, and secured by substantially all of the assets of the company and the term loan obligors, including 17 ethanol production facilities with annual capacity of approximately 1.5 billion gallons, as well as the vinegar production facilities.

The term loan agreement provides for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, the following: nonpayment of principal or interest; breach of covenants or other agreements in the term loan agreement; defaults in failure to pay certain other indebtedness; and certain events of bankruptcy or insolvency. If any event of default occurs, the remaining principal balance and accrued interest on the term loan agreement will become immediately due and payable.

~~In September 2013, we issued $120.0 million of~~ 3.25% convertible senior notes due October 1, 2019 in ~~2018, or 3.25%~~cash, including accrued and unpaid interest, in privately negotiated transactions concurrently with the offering of 4.00% notes. On July 19, 2019, we closed on the issuance of an additional $10.0 million aggregate principal amount of the 4.00% notes ~~which~~(the “Option Notes”) to the initial purchasers. The Option Notes provided us with net proceeds, after deducting commissions and our offering expenses, of approximately $9.5 million. The Option Notes have the same terms as the 4.00% notes issued on June 21, 2019, and were issued under the same Indenture dated as of June 21, 2019. After the issuance of the Option Notes, total aggregate principal of the 4.00% notes outstanding is $115.0 million.

The 4.00% notes are senior, unsecured obligations, with interest payable on ~~April~~January 1 and October 1 of each year. Prior to April 1, 2018, the 3.25% notes were not convertible unless certain conditions are satisfied. The conversion rate is subject to adjustment upon the occurrence of certain events, including when the quarterly cash dividend exceeds $0.04 per share. The conversion rate was recently adjusted as of September 30, 2018, to 50.8753 shares of common stock per $1,000 of principal, which is equal to a conversion price of approximately $19.66 per share. We may settle the 3.25% notes in cash, common stock or a combination of cash and common stock. For all conversions of notes which occur on or after April 1, 2018, the company elected to convert for whole shares of common stock with any fractional share being settled with cash in lieu.

~~The New Notes are the senior, unsecured obligations of the company and bear interest at a rate of 3.25% per annum, payable semi-annually in arrears on April 1 and October~~July 1 of each year, beginning ~~on October~~January 1, ~~2018. Interest on the New Notes will accrue from, and including, April 1, 2018.~~2020, at a rate of 4.00% per annum. The New Notes will mature on October 1, 2019, unless earlier converted. Holders of New Notes may convert their New Notes, at their option, in integral multiples of $1,000 principal amount, at any time prior to the close of business on the scheduled trading day immediately preceding the maturity date of the New Notes. Theinitial conversion rate ~~for the New Notes~~ will ~~initially~~ be ~~50.6481~~64.1540 shares of ~~the company’s~~our common stock per $1,000 principal amount of ~~New Notes,~~the 4.00% notes, which ~~corresponds~~is equivalent to an initial conversion price of approximately ~~$19.74~~$15.59 per share of ~~the company’s~~our common stock. The conversion rate will be subject to adjustment upon the occurrence of certain events.

~~Upon conversion of~~ In addition, we may be obligated to increase the ~~convertible notes, the company will settle its conversion obligation by delivering shares of its common stock at the applicable~~ conversion rate ~~together~~for any conversion that occurs in connection with ~~cash in lieu of any fractional share.~~

~~The company does not have~~certain corporate events, including our calling the ~~right to redeem the New Notes at its election before their maturity. The New Notes are subject to customary provisions providing~~4.00% notes for the acceleration of their principal and interest upon the occurrence of events that constitute an “event of default.” Events of default include, among other events, certain payment defaults, defaults in settling conversions, certain defaults under the company’s other indebtedness and certain insolvency-related events. Upon maturity, the company willredemption. We may settle the ~~New Notes~~4.00% notes in ~~cash.~~cash, common

stock or a combination of cash and common stock. At September 30, 2019, the outstanding principal balance was $82.2 million on the 4.00% notes.

In August 2016, we issued $170.0 million of 4.125% convertible senior notes due in 2022, or 4.125% notes, which are senior, unsecured obligations with interest payable on March 1 and September 1 of each year. Prior to March 1, 2022, the 4.125% notes are not convertible unless certain conditions are satisfied. The initial conversion rate is 35.7143 shares of common stock per $1,000 of principal which is equal to a conversion price of approximately $28.00 per share. The conversion rate is subject to adjustment upon the occurrence of certain events, including when the quarterly cash dividend exceeds $0.12 per share. We may settle the 4.125% notes in cash, common stock or a combination of cash and common stock. At September 30, 2019, the outstanding principal balance was $147.6 million on the 4.125% notes.

Ethanol Production Segment

We have small equipment financing loans, ~~capital~~finance leases on equipment or facilities, and other forms of debt financing.

Agribusiness and Energy Services Segment

Green Plains Grain has a $125.0 million senior secured asset-based revolving credit facility to finance working capital up to the maximum commitment based on eligible collateral, which matures in July of 2019. This facility can be increased by up to $75.0 million with agent approval and up to $50.0 million for seasonal borrowings. Total commitments outstanding under the facility cannot exceed $~~250.0 million. At September 30, 2018, the outstanding principal balance was $30.0 million on the facility and our interest rate was 5.25%.~~

Green Plains Trade has a $300.0 million senior secured asset-based revolving credit facility to finance working capital up to the maximum commitment based on eligible collateral, which matures in July of 2022. This facility can be increased by up to $70.0 million with agent approval. Advances are subject to variable interest rates equal to a daily LIBOR rate plus 2.25% or the base rate plus 1.25%. The unused portion of the credit facility is also subject to a commitment fee of 0.375% per annum. At September 30, ~~2018,~~2019, the outstanding principal balance was ~~$133.7~~$119.6 million on the facility and the interest rate was ~~4.26%~~4.17%.

Green Plains Grain has a $100.0 million senior secured asset-based revolving credit facility to finance working capital up to the maximum commitment based on eligible collateral, which matures in June of 2022. This facility can be increased by up to $75.0 million with agent approval and up to $50.0 million for seasonal borrowings. Total commitments outstanding under the facility cannot exceed $225.0 million. On June 28, 2019, the company amended the credit facility to extend the existing maturity date from July 26, 2019 to June 28, 2022 and lower the maximum commitment from $125.0 million to $100.0 million. Depending on utilization, the total unused portion of the $100.0 million revolving credit facility is also subject to a commitment fee ranging from 0.375% to 0.50% per annum. At September 30, 2019, the outstanding principal balance was $20.0 million and the interest rate was 5.06%.

Green Plains Grain has entered into short-term inventory financing agreements with a financial institution. At September 30, 2019, 0.9 million bushels of corn had been designated as collateral under these agreements at initial values totaling $3.8 million. The company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations in market prices of the inventory. At September 30, 2019, the short-term notes payable were valued at $4.0 million and our interest rate was 4.68%.

Green Plains Commodity Management has an uncommitted $20.0 million revolving credit facility which matures April 30, 2023 to finance margins related to its hedging programs. Advances are subject to variable interest rates equal to LIBOR plus 1.75%. At September 30, ~~2018,~~2019, the outstanding principal balance was ~~$12.1~~$5.5 million ~~on the facility~~ and the interest rate was ~~3.95%~~3.66%.

Green Plains Grain has entered into short-term inventory financing agreements with a financial institution. At September 30, 2018, 1.0 million bushels of corn had been designated as collateral under these agreements at initial values totaling $4.2 million. The ~~company has accounted for the agreements as short-term notes, rather than sales, and has elected the fair value option to offset fluctuations~~facility was amended in ~~market prices of the inventory. At September 30, 2018, the short-term notes payable were valued at $4.0 million and our interest rate was 4.68%.~~

~~Food and Ingredients Segment~~

Green Plains Cattle has a $500.0 million senior secured asset-based revolving credit facility to finance working capital up to the maximum commitment based on eligible collateral, which matures in April of 2020. This facility can be increased by up to $100.0 million with agent approval and includes a swing-line sublimit of $20.0 million. ~~On July 31, 2018, the company amended the credit facility, to increase~~October 2019, increasing the maximum commitment from ~~$425.0~~$20.0 million to ~~$500.0~~$30.0 million. ~~At September 30, 2018,~~

Food and Ingredients Segment

Upon the ~~outstanding principal balance was $376.7 million~~disposition of Green Plains Cattle, the food and ingredient segment no longer has any forms of debt financing. Refer to Note 3 – Acquisitions, Dispositions and Discontinued Operations for further discussion on the ~~facility~~disposition and ~~our interest rate was 4.28%.~~discontinued operations classification.

Advances under the revolving credit facility, as amended, are subject to variable interest rates equal to LIBOR plus 2.0% to 3.0% or the base rate plus 1.0% to 2.0%, depending on the preceding three months’ excess borrowing availability. The unused portion of the credit facility is also subject to a commitment fee of 0.20% to 0.30% per annum, depending on the

~~preceding three months’ excess borrowing availability. Interest is payable as required, but not less than quarterly in arrears and principal is due upon maturity.~~

Partnership Segment

Green Plains Partners, through a wholly owned subsidiary, has a ~~$235.0~~$200.0 million revolving credit facility ~~which matures on July 1, 2020,~~ to fund working capital, acquisitions, distributions, capital expenditures and other general partnership purposes. ~~On February 20, 2018,~~The credit facility matures on July 1, 2020, and as a result, was reclassified to current maturities of long-term debt during the ~~partnership accessed a portion of its available accordion~~three months ended September 30, 2019. We intend to ~~increase~~renew the revolving credit facility ~~by $40.0 million, from $195.0 million to $235.0 million.~~or replace it with a new another line of credit on or before the expiration date. The credit facility can be increased by an additional $20.0 million without the consent of the lenders. At September 30, ~~2018,~~2019, the outstanding principal balance ~~was $128.0 million on~~of the facility was $132.0 million and ~~had an average~~the interest rate ~~of 4.74%~~was 5.04%.

Contractual Obligations

Contractual obligations as of September 30, ~~2018,~~2019, were as follows (in thousands):


		Payments Due By Period										Payments Due By Period
Contractual Obligations		Total	Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years			Total	Less Than ‎1 Year		1-3 Years		3-5 Years		More Than ‎5 Years

Long-term and short-term debt obligations (1)	$	1,435,128	$	622,198	$	140,168	$	180,797	$	491,965	$	590,845	$	282,142	$	172,028	$	117,021	$	19,654
Interest and fees on debt obligations (2)		244,039		75,720		87,763		72,262		8,294		67,644		24,705		24,987		10,297		7,655
Operating lease obligations (3)		103,920		26,836		33,498		13,510		30,076		71,474		19,329		21,968		10,865		19,312
Other		13,673		812		8,548		2,428		1,885		19,952		2,517		6,871		2,351		8,213
Purchase obligations:
Forward grain purchase contracts (4)		240,753		235,746		2,840		2,000		167		144,099		140,777		2,155		1,167		-
Other commodity purchase contracts (5)		171,165		163,436		7,008		721		-		127,570		108,900		16,577		2,093		-
Other		273		64		209		-		-		41		41		-		-		-
Total contractual obligations	$	2,208,951	$	1,124,812	$	280,034	$	271,718	$	532,387	$	1,021,625	$	578,411	$	244,586	$	143,794	$	54,834

~~(1)~~

~~Includes the current portion of long-term debt and excludes the effect of any debt discounts and issuance costs.~~

~~(2)~~

Interest amounts are calculated over the terms of the loans using current interest rates, assuming scheduled principal and interest amounts are paid pursuant to the debt agreements. Includes administrative and/or commitment fees on debt obligations.

~~(3)~~

~~Operating lease costs are primarily for railcars and office space.~~

~~(4)~~

~~Purchase contracts represent index-priced and fixed-price contracts. Index purchase contracts are valued at current quarter-end prices.~~

~~(5)~~

~~Includes fixed-price ethanol, dried distillers grains and natural gas purchase contracts.~~

(1)Includes the current portion of long-term debt and future finance lease obligations and excludes the effect of any debt discounts and issuance costs.

(2)Interest amounts are calculated over the terms of the loans using current interest rates, assuming scheduled principal and interest amounts are paid pursuant to the debt agreements. Includes administrative and/or commitment fees on debt obligations.

(3)Operating lease costs are primarily for railcars and office space.

(4)Purchase contracts represent index-priced and fixed-price contracts. Index purchase contracts are valued at current quarter-end prices.

(5)Includes fixed-price ethanol, dried distillers grains and natural gas purchase contracts.

Critical Accounting Policies and Estimates

Key accounting policies, including those relating to revenue recognition, depreciation of property and equipment, ~~asset retirement obligations,~~carrying value of intangible assets, impairment of long-lived assets and goodwill, derivative financial instruments, and accounting for income taxes, are impacted significantly by judgments, assumptions and estimates used in the preparation of the consolidated financial statements. Information about our critical accounting policies and estimates are included in our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Off-Balance Sheet Arrangements

~~We do not have~~With the exception of one director, none of our officers or employees holds an ownership interest in any ~~off-balance sheet arrangements other than~~of our joint ventures or entities. As of September 30, 2019, we owned a 50% interest in GPCC, a joint venture that owns and operates six cattle feeding operations. Mr. Ejnar Knudsen, a member of the ~~operating leases,~~company’s board of directors, has an indirect ownership interest in GPCC of 0.0736% by reason of his ownership in TGAM Agribusiness Fund LP. Based on the purchase price, the value of that ownership interest is approximately $0.1 million. Mr. Knudsen also is the CEO and partial owner of AGR Partners LLC (AGR) which ~~are entered into during~~provides investment advisory services to TGAM Agribusiness Fund LP pursuant to a sub-advisory agreement between AGR Partners LLC and Nuveen Alternative Advisors LLC, which is the ~~ordinary course~~investment manager for TGAM Agribusiness Fund LP.

At September 30, 2019, the outstanding principal balance of ~~business and disclosed in the~~ ~~Contractual Obligations~~ ~~section above.~~GPCC’s senior secured asset-based revolving credit facility was $355.7 million, of which our pro rata portion was $177.9 million, none of which is reflected as a liability on our consolidated balance sheet.

Item 3. Quantitative and Qualitative 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 all of our business in U.S. dollars and are not currently exposed to 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 LIBOR. A 10% increase in interest rates would affect our

interest cost by approximately ~~$6.4~~$1.3 million per year. At September 30, ~~2018,~~2019, we had ~~$1.4 billion~~$530.4 million in debt, ~~$1.2 billion~~$281.1 million of which had variable interest rates.

For additional information related to our debt, see Note 9 – Debt included as part of the notes to consolidated financial statements and Note 1112 – Debt included as part of the notes to consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, ~~2017.~~2018.

Commodity Price Risk

Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains, corn oil and natural ~~gas, ethanol, distillers grains~~gas. Ethanol prices are sensitive to world crude oil supply and ~~cattle.~~demand, the price of crude oil, gasoline and 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 prices are impacted by livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production. 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. Ethanol prices are sensitive to world crude oil supply and demand, the price of crude oil, gasoline and corn, the price of substitute fuels, refining capacity and utilization, government regulation and consumer demand for alternative fuels. Distillers grains prices are impacted by livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production. Cattle prices are impacted by weather conditions, overall economic conditions and government regulations.

To reduce the risk associated with fluctuations in the price of ethanol, corn, ~~natural gas, ethanol,~~ distillers grains, corn oil, and ~~cattle,~~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. During the three and nine months ended September 30, ~~2018,~~2019, revenues included net gains of ~~$5.3~~$12.4 million and ~~$4.1~~net losses of $12.0 million, respectively, and cost of goods sold included net gains of ~~$12.1~~$2.2 million and ~~$3.5~~net losses of $0.3 million, respectively, associated with derivative financial 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 September 30, ~~2018, are~~2019, which is 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		Estimated Total Volume ‎ Requirements for the ‎ Next 12 Months (1)	Unit of ‎Measure	Net Income Effect of ‎ Approximate 10% ‎Change in Price

Ethanol	1,470,000	Gallons	$	165,213	1,123,000	Gallons	$	129,089
Corn	518,000	Bushels	$	153,112	387,000	Bushels	$	114,112
Distillers grains	4,100	Tons (2)	$	39,244	2,900	Tons (2)	$	26,532
Corn oil	359,000	Pounds	$	7,053	292,000	Pounds	$	5,368
Natural gas	41,700	MmBTU	$	6,154	31,200	MmBTU	$	4,180

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 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 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.

Our daily net commodity position consists of inventories related to purchase and sale contracts and exchange-traded contracts. The fair value of our position was approximately ~~$0.5~~$3.7 million for grain ~~based on market prices~~ at September 30, ~~2018.~~2019. Our market risk at that date, based on the e~~stimated~~estimated net income effect resulting from a hypothetical 10% change in price, was approximately ~~$43 thousand.~~$0.3 million.

~~Food and Ingredients Segment~~

In the food and ingredients segment, our physical cattle purchase and sale contracts and derivatives are marked to market. To reduce commodity price risk caused by market fluctuations for purchase and sale commitments of cattle, 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 purchase and sale contracts for cattle. 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 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 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.

~~Our daily net commodity position consists of inventories related to purchase and sale contracts and exchange-traded contracts. The fair value of our position was~~ ~~approximately $5.6 million for~~ ~~cattle at September 30, 2018. Our market risk at that date, based on the estimated net income effect resulting from a hypothetical 10% change in price, was approximately $0.4 million.~~

~~Our daily net commodity position consists of inventories related to purchase and sale contracts and exchange-traded contracts. The fair value of our position was~~ ~~approximately $14.3 million for~~ ~~grain and other cattle feed at September 30, 2018. Our market risk at that date, based on the estimated net income effect resulting from a hypothetical 10% change in price, was approximately $1.1 million.~~

Item 4. 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 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 September 30, ~~2018,~~2019, 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.

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 U.S. generally accepted accounting principles. There were no material changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

‎

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently involved in litigation that has arisen during the ordinary course of business. We do not believe this litigation will have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors.

Investors should carefully consider the discussion of risks and the other information in our annual report on Form 10-K for the year ended December 31, ~~2017,~~2018, in Part I, Item 1A, “Risk Factors,” and the discussion of risks and other information in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under “Cautionary Information Regarding Forward-Looking Statements,” of this report. Investors should also carefully consider the discussion of risks with the partnership under the heading “Risk Factors” and other information in their annual report on Form 10-K for the year ended December 31, ~~2017.~~2018. Although we have attempted to discuss key factors, our investors need to be aware that other risks may prove to be important in the future. New risks may emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. The following risk ~~factor supplements~~factors supplement and/or updates risk factors previously disclosed and should be considered in conjunction with the other information included in, or incorporated by reference in, this quarterly report on Form 10-Q.

~~Government mandates affecting ethanol usage could change~~Financial performance of our equity method investments are subject to risks beyond our control and ~~impact~~can vary substantially from period to period.

The company invests in certain limited liability companies, which are accounted for using the ~~ethanol market.~~

~~Under~~equity method of accounting. This means that the ~~provisions~~company’s share of net income or loss in the investee increases or decreases, as applicable, the carrying value of the ~~EISA, Congress established~~investment. By operating a ~~mandate setting~~business through this arrangement, we do not have control over operating decisions as we would if we owned the ~~minimum volume of renewable fuels that must be blended with gasoline under~~business outright. Specifically, we cannot act on major business initiatives without the RFS II, which affects the domestic market for ethanol. 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 shall be 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 impact on food prices.

Our operations could be adversely impacted by legislation or EPA actions, as set forth below or otherwise, that may reduce the RFS II mandate. 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 II mandate, may affect future demand. A significant increase in supply beyond the RFS II mandate could have an adverse impact on ethanol prices. Moreover, changes to RFS II could negatively impact the price of ethanol or cause imported sugarcane ethanol to become more economical than domestic ethanol.

According to RFS II, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. Since 2018 is the first year the total RVOs are more than 20% below statutory levels, the EPA Administrator directed his staff to initiate the required technical analysis to perform any future reset consistent with the reset rules. If 2019 RVOs are also more than 20% below statutory levels, the RVO reset will be triggered under RFS II and the EPA will be required to modify statutory volumes through 2022 within one yearconsent of the ~~trigger event, based~~other investors.

The company recognizes these investments as a separate line item in the consolidated balance sheets its proportionate share of earnings on a separate line item in the ~~same factors used to set the RVOs post-2022.~~

~~The U.S. Federal District Court for the D.C. Circuit ruled on July 28, 2017, in favor~~consolidated statements of the Americans for Clean Energy and its petitioners against the EPA related to its decision to lower the 2016 volume requirements. The Court concluded the EPA erred in how it interpreted the “inadequate domestic supply” waiver provision of RFS II, which authorizes the EPA to consider supply-side factors affecting the volume of renewable fuel available to refiners, blenders, and importers to meet the statutory volume requirements.operations. As a result, the ~~Court vacated~~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 ~~EPA’s decision~~value of our investment.

Our risk management and commodity trading strategies could be ineffective and expose us to ~~reduce the total renewable fuel volume requirements for 2016 through its waiver authority, which the EPA is expected~~decreased liquidity.

As market conditions warrant, we use forward contracts to ~~address.~~

~~On November 22, 2017, the EPA issued a Notice~~sell some of ~~Denial of Petitions for rulemaking to change the RFS point of obligation which resulted in the EPA confirming the point of obligation will not change. However, Valero Energy~~our ethanol, distillers grains, corn oil, and ~~refining trade group American Fuel and Petrochemical Manufacturers (AFPM) have challenged the EPA’s handling~~live cattle or buy some of the ~~U.S. biofuel mandate~~corn, natural gas, or feeder cattle we need to partially offset commodity price volatility. We also engage in ~~separate actions~~other hedging transactions and other commodity trading involving exchange-traded futures contracts for corn, natural gas, cattle and ethanol and other agricultural commodities. The financial impact of these activities depends on January 26, 2018. AFPM is asking the D.C. U.S. Court of Appeals to review the EPA’s November 2017 decision to reject proposed changes to the structure of the RFS, including moving the point of obligation from refiners and importers of fuel to fuel blenders. Valero filed two petitions with the same court, one seeking review of the annual Renewable Volume Obligation (RVO) rule set by the EPA for 2018 and 2019, which dictates the

volumes of renewable fuels to be blended in the coming years, and a second arguing against the EPA’s December 2017 assertion that the agency has fulfilled its duty to periodically review the RFS as directed by statute.

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 RFS II mandate. A significant increase in supply beyond the RFS II mandate could have an adverse impact on ethanol prices. Moreover, any changes to RFS II originating from issues associated with the market price of RINs could negatively impact the demand for ethanol, discretionary blending of ethanol and/or the price of ~~ethanol. Recent actions by~~ the ~~EPA~~commodities involved and/or our ability to ~~grant small refiner exemptions as well as~~physically receive or deliver the ~~Philadelphia Energy Solutions Bankruptcy Court’s decision~~commodities.

Hedging arrangements expose us to ~~grant RIN relief have resulted in lower RIN prices.~~

~~Flexible-fuel vehicles, which are designed to run~~risk of financial loss when the counterparty defaults on ~~a mixture of fuels such as E85, receive preferential treatment to meet corporate average fuel economy standards~~its contract or, in the ~~form~~case of ~~CAFE credits. Flexible-fuel vehicle credits have been decreasing since 2014~~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, natural gas and feeder cattle and an increased cash price for ethanol, distillers grains, live cattle and 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 ~~completely phased out by 2020. Absent CAFE preferences, auto manufacturers may~~profitable or effectively offset commodity price volatility. If they are not ~~be willing to build flexible-fuel vehicles, reducing the growth~~our results of ~~E85 markets~~operations and ~~resulting in lower ethanol prices.~~

~~To the extent federal or state laws or regulations are modified, the demand for ethanol~~financial position may be ~~reduced, which could negatively and materially affect~~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 ~~financial performance.~~

~~We may be affected by our portfolio optimization strategy.~~

~~We announced that we are evaluating the performance of our entire portfolio of assets and businesses. Based on this evaluation,~~open derivative positions, we may ~~sell certain 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~~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 ~~nature of the assets sold,~~future.

The interest rates under our ~~profitability~~revolving credit facility may be impacted by ~~lost operating income~~the phase-out of LIBOR.

LIBOR is the basic rate of interest widely used as a reference for setting the interest rates on loans globally. We use LIBOR as a reference rate for our revolving credit facilities. In 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if LIBOR will cease to exist at that time or ~~cash flows from~~if new methods of calculating LIBOR will be established such ~~businesses. In addition, divestitures we complete may not yield~~that it continues to exist after 2021. The U.S. Federal Reserve, in conjunction with the ~~targeted improvements in their business and may divert management’s attention from our day-to-day operations.~~ ~~Any charges that~~Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index, the Secured Overnight Financing Rate (“SOFR”), calculated using short-term repurchase agreements backed by Treasury securities. We are evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, however, we are ~~required~~not able to ~~record~~predict whether LIBOR will cease to be available after 2021, whether SOFR will become a widely accepted benchmark in place of LIBOR, or what the ~~failure~~impact of such a possible transition to ~~achieve the intended financial results associated with our portfolio optimization strategy could have an adverse effect~~SOFR may be on our business, financial condition, orand results of operations.

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

Employees 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 third quarter of ~~2018:~~2019:


Period	Total Number of Shares Withheld for Employee Awards	Average Price Paid per Share		Total Number of ‎ Shares Withheld for ‎Employee Awards	Average Price ‎Paid per Share
July 1 - July 31	6,895	$	16.60	-	$	-
August 1 - August 31	1,420		17.36	441		7.91
September 1 - September 30	3,637		17.00	489		8.67
Total	11,952	$	16.81	930	$	8.31

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



‎ ‎ ‎ ‎Date: November ~~9, 2018~~7, 2019	GREEN PLAINS INC. (Registrant) By: /s/ Todd A. Becker _ Todd A. Becker ‎President and Chief Executive Officer (Principal Executive Officer)
‎ ‎ ‎Date: November ~~9, 2018~~7, 2019	By: /s/ ~~John W. Neppl~~G. Patrich Simpkins Jr._ ~~John W. Neppl~~G. Patrich Simpkins Jr. ‎Chief Financial Officer (Principal Financial Officer)



		Page
Commonly Used Defined Terms		2
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements

	Consolidated Balance Sheets	3

~~Item 1.~~	~~Financial Statements~~

	~~Consolidated Balance Sheets~~	3

	Consolidated Statements of Operations	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Cash Flows	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3541

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4955

Item 4.	Controls and Procedures	5157


PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	58
~~Item 1.~~	~~Legal Proceedings~~	53
Item 1A.	Risk Factors	58
~~Item 1A.~~	~~Risk Factors~~	53

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5459

Item 3.	Defaults Upon Senior Securities	5460

Item 4.	Mine Safety Disclosures	5560

Item 5.	Other Information	5560

Item 6.	Exhibits	5660

Signatures		5761


	September 30, 2018		December 31, 2017		September 30, ‎2019		December 31, ‎2018
Total assets (1):
Ethanol production	$	1,075,469	$	1,144,459	$	873,793	$	872,845
Agribusiness and energy services		404,903		554,981		368,146		399,633
Food and ingredients		884,205		725,232
Partnership		71,511		74,935		102,497		67,297
Corporate assets		252,554		295,217		354,371		334,236
Assets of discontinued operations						-		552,459
Intersegment eliminations		(3,808)		(10,174)		(6,736)		(10,038)
	$	2,684,834	$	2,784,650	$	1,692,071	$	2,216,432


	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Location of Gain or (Loss) Reclassified from Accumulated Other	Three Months Ended September 30,				Nine Months Ended September 30,
Comprehensive Income into Income	2018		2017		2018		2017
Revenues	$	(3,197)	$	(5,242)	$	(1,749)	$	1,734
Cost of goods sold		1,350		(1,861)		1,451		(1,679)
Net gain (loss) recognized in earnings before tax	$	(1,847)	$	(7,103)	$	(298)	$	55


	Loss Recognized in Other Comprehensive Income on Derivatives
Loss Recognized in	Three Months Ended September 30,				Nine Months Ended September 30,
Other Comprehensive Income on Derivatives	2018		2017		2018		2017
Commodity contracts	$	(18,709)	$	(12,235)	$	(1,865)	$	(15,069)


September 30, 2018
	Exchange Traded		Non-Exchange Traded
Derivative Instruments	Net Long & (Short) (1)		Long (2)	(Short) (2)	Unit of Measure	Commodity

Futures	(52,335)				Bushels	Corn, Soybeans and Wheat
Futures	(11,450)	(4)			Bushels	Corn
Futures	5,135				Gallons	Ethanol
Futures	(25,620)				Gallons	Ethanol
Futures	(18,798)				MmBTU	Natural Gas
Futures	(13,413)	(4)			MmBTU	Natural Gas
Futures	(57,250)				Pounds	Cattle
Futures	(413,720)	(3)			Pounds	Cattle
Futures	21				Barrels	Crude Oil
Futures	(600)				Tons	Soybean Meal
Futures	3,570				Gallons	Natural Gasoline
Options	14,409				Bushels	Corn, Soybeans and Wheat
Options	3,266				Gallons	Ethanol
Options	(74)				MmBTU	Natural Gas
Options	862				Pounds	Livestock
Options	78				Barrels	Crude Oil
Forwards			41,789	(138)	Bushels	Corn and Soybeans
Forwards			19,132	(426,529)	Gallons	Ethanol
Forwards			212	(421)	Tons	DDG
Forwards			12,222	(70,173)	Pounds	Corn Oil
Forwards			22,501	(1,858)	MmBTU	Natural Gas
Forwards			61	(31)	Barrels	Crude Oil


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2017	143,750	$	12.44	1.8	$	635
Granted	-		-	-		-
Exercised	(15,000)		10.00	-		120
Forfeited	-		-	-		-
Expired	-		-	-		-
Outstanding at September 30, 2018	128,750	$	12.72	1.2	$	577
Exercisable at September 30, 2018 (1)	128,750	$	12.72	1.2	$	577


	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, 2017	1,068,947	$	20.41
Granted	664,642		18.20
Forfeited	(14,272)		20.64
Vested	(541,586)		20.58
Non-Vested at September 30, 2018	1,177,731	$	19.08	1.9


Period	Number of Shares Purchased		Average Price Paid per Share		Number of Shares Repurchased as Part of Repurchase Program	Total Number of Shares Repurchased as Part of Repurchase Program	Approximate Dollar Value of Shares that may yet be Repurchased under the Program ⁽²⁾ ‎(in thousands)
July 1 - July 31	-		$	-	-	4,316,626	$	40,420
August 1 - August 31	315,932	⁽¹⁾		7.67	300,932	4,617,558		38,097
September 1 - September 30	1,361,675			10.03	1,361,675	5,979,233		24,406
Total	1,677,607		$	9.59	1,662,607	5,979,233	$	24,406




Exhibit No.	Description of Exhibit
2.1	~~Asset~~Securities Purchase Agreement, dated as of September 6, 2019, by and among Green Plains ~~Bluffton LLC,~~Inc., Green Plains ~~Holdings II LLC, Green Plains Inc. and Valero Renewable Fuels~~Cattle Company LLC, ~~dated October 8, 2018. (The~~TGAM Agribusiness Fund Holdings-B LP, and StepStone Atlantic Fund, L.P. (Certain schedules to the ~~Asset~~Securities Purchase Agreement have been omitted. The ~~Company~~company will furnish such schedules to the SEC upon request.) (incorporated herein by reference to Exhibit 2.1 of the company’s Current Report on Form 8-K filed ~~on October 10, 2018)~~September 9, 2019)
~~2.2~~10.1	~~Asset Purchase~~Second Amended and Restated Limited Liability Company Agreement ~~among~~of Green Plains ~~Partners LP, Green Plains Holdings LLC, Green Plains Operating~~Cattle Company LLC, ~~Green Plains Ethanol Storage LLC, Green Plains Logistics LLC, Green Plains Inc., Green Plains Trade Group LLC, Green Plains Bluffton LLC and Green Plains Holdings II LLC,~~ dated ~~October 8, 2018. (The~~September 6, 2019 (Certain schedules to the ~~Asset Purchase~~Second Amended and Restated Limited Liability Company Agreement have been omitted. The ~~Company~~company will furnish such schedules to the SEC upon request.) (incorporated herein by reference to Exhibit ~~2.2~~10.1 of the company’s Current Report on Form 8-K filed ~~on October 10, 2018)~~September 9, 2019)
~~4.1~~10.2	~~Indenture relating to the 3.25% Convertible Senior Notes due 2019, dated August 14, 2018,~~Promissory Note between Green Plains Inc. and ~~Willington Trust, National Association~~StepStone Atlantic Fund, L.P., dated September 6, 2019 (incorporated herein by reference to Exhibit ~~4.1~~10.2 of the company’s Current Report on Form 8-K filed ~~on August 14, 2018)~~September 9, 2019)
~~10.1~~10.3	~~Seventh Amendment to the~~Amended and Restated Credit Agreement, dated as of ~~October 5, 2018,~~August 28, 2019, by and among Green Plains Cattle Company LLC, ~~and~~ Bank of the West and ING Capital LLC, as Joint Administrative Agents, and the lenders party to the Credit Agreement (Certain schedules to the Amended and Restated Credit Agreement have been omitted. The company will furnish such schedules to the SEC upon request.) (incorporated herein by reference to Exhibit 10.3 of the company’s Current Report on Form 8-K filed September 9, 2019)
~~10.2~~31.1	~~Seller Guaranty, dated October 8, 2018, Green Plains Inc.~~
~~10.3~~	~~Buyer Guaranty, dated October 8, 2018, Valero Energy Corporation~~
~~10.4~~	Second Amendment to Credit Agreement, dated February 16, 2018, by and among Green Plains Operating Company LLC, as the Borrower, the subsidiaries of the Borrower identified therein, Bank of America, N.A. and the other lenders party thereto.
~~10.5~~	~~Incremental Joinder Agreement, dated February 20, 2018, among Green Plains Operating Company LLC and Bank of America, as Administrative Agent~~
~~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
101	The following information from Green Plains Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, ~~2018,~~2019, formatted in Inline Extensible Business Reporting Language ~~(XBRL)~~(iXBRL): ~~(i)~~i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements
104	The cover page from Green Plains Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019, formatted in iXBRL.

TABLE OF CONTENTS

Page

Commonly Used Defined Terms

2

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Balance Sheets

3

PART II – OTHER INFORMATION